Mumbai, February 1: The Indian stock markets closed sharply lower on Sunday during a special trading session following the presentation of the Union Budget 2026. The announcement of increased Security Transaction Tax (STT) on futures and options triggered widespread selling pressure.
At closing, the 30-share BSE Sensex fell by 1,546.84 points, or 1.88%, to settle at 80,722.94. The NSE Nifty 50 index dropped 495.20 points, or 1.96%, ending at 24,825.45. During the session, Sensex touched a low of 79,899.42, marking an intraday fall of nearly 3,000 points, while the Nifty slid to 24,572.
Finance Minister Nirmala Sitharaman, presenting the third consecutive budget of the Modi government’s third term, announced an increase in STT rates to curb speculative trading in the futures and options segment. STT on futures was raised to 0.05%, and the tax on options premium was increased from 0.10% to 0.15%.
This move led to significant selling in the equity markets as investors turned cautious post-budget, exerting downward pressure on prices despite the budget’s focus on accelerating economic growth and maintaining fiscal discipline.
The broader market also saw heavy selling pressure. The Nifty Midcap 100 index declined by 2%, and the Nifty Smallcap 100 fell by 2.7%. The India VIX, a gauge of market volatility and investor anxiety, surged nearly 12%, reflecting growing market nervousness.
Sector-wise, all indices closed in the red except the IT sector. The Nifty PSU Bank index plunged nearly 6%, while the Nifty Metal index dropped 4%. Nifty Bank and Nifty Financial Services indices also declined by over 2%.
Among Nifty 50 stocks, India Electronics, Hindalco, and ONGC were the biggest losers, each falling by around 5-6%. Other major decliners included SBI, Adani Ports, Coal India, Jio Financial Services, Nestle India, ITC, and Tata Consumer Products. On the upside, Wipro, TCS, and Max Healthcare gained nearly 2%, showing relative strength.
The hike in STT aims to check excessive speculation in the futures and options market, but it has also raised caution among investors, leading to a sharp market correction.
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