Dated 01.02.2026 : Finance Minister Nirmala Sitharaman today delivered her first Sunday Budget speech and the stock market experienced its worst Budget Day in six years during today’s special Sunday session.
While the markets opened with a slight positive bias, they crashed sharply as the “fine print” of the budget—specifically the tax hikes on trading—became clear.
The Final Numbers (Closing Levels)
The indices saw massive volatility, with the Sensex at one point diving nearly 3,000 points before recovering slightly toward the close.
- BSE Sensex: Fell 1,546.84 points (1.88%) to close at 80,722.94.
- NSE Nifty 50: Dropped 495.20 points (1.96%) to settle at 24,825.45.
- Investor Wealth: Approximately ₹10 lakh crore of market capitalisation was wiped out in a single day.
Why Did the Market Crash?
The sell-off was almost entirely driven by tax proposals that impact market liquidity and trading costs:
- Hike in STT (Securities Transaction Tax): * Futures: Tax increased from 0.02% to 0.05% (a 150% jump).
- Options: Tax on premiums increased from 0.1% to 0.15%.
- Market Impact: This “shocker” hit the high-frequency and retail derivative trading community, leading to an immediate exit from the markets.
- Buyback Taxation: The proposal to tax share buybacks as capital gains for shareholders (instead of companies paying the tax) was seen as a negative for minority investors.
Volatility Index (India VIX): Surged by 14%, reflecting extreme panic and uncertainty among traders.
- Winners vs. Losers
Despite the bloodbath, a few sectors stood tall due to specific budget allocations:
- The Gainers (IT & Healthcare): * IT Stocks:Wipro, TCS, and Infosys gained (up to 2%) after the FM increased the “safe harbour” threshold for IT services to ₹2,000 crore.
- Healthcare: Max Healthcare and Sun Pharma rose following the ₹10,000 crore Biopharma SHAKTI announcement.
- The Losers (Banking, Defense & Metals): * PSU Banks:SBI was the biggest loser, falling over 5.4%.
- Defense: Despite a 15% hike in outlay, stocks like BEL tanked over 5% as the market expected even more aggressive spending.
Commodities:MCX (Multi-Commodity Exchange) hit its lower circuit, plunging 19% due to the STThike .
Sectors that lost :
The heavy selling was triggered primarily by the STT (Securities Transaction Tax) hike on derivatives, which hit high-volume sectors and market infrastructure stocks hardest .
| Sectoral Index | Percentage Change | Key Reasons |
| Nifty PSU Bank | -5.57% | Massive sell-off in SBI (-5.31%) and other state lenders. |
| Nifty India Defence | -5.00% | Profit-booking as the 15% hike in outlay failed to meet high expectations; BEL fell over 6%. |
| Nifty Metal | -3.80% | Pressured by global demand concerns; Hindalco and Tata Steel were top drags. |
| Nifty Bank | -2.00% | Dragged down by the PSU pack and general nervousness in the financial space. |
| Nifty Realty | -6.00% | Sharpest faller in terms of broader indices; disappointed by the lack of direct tax relief for homebuyers. |
| Midcap & Smallcap | -2.2% to -2.8% | Risk-off sentiment led to broader market underperformance. |
The Gainers (Rare Green)
These sectors bucked the trend thanks to specific policy incentives and their “defensive” nature during high volatility.
| Sectoral Index | Percentage Change | Key Reasons |
| Nifty IT | +0.57% | Top Performer. Boosted by the “Safe Harbour” threshold being raised to ₹2,000 Cr and tax holidays for data centers. |
| Nifty Healthcare | +0.30% | Resilience driven by the ₹10,000 Cr Biopharma SHAKTI scheme; Max Healthcare rose ~2%. |
Crucial Market Note
- Market Infrastructure: Stocks like BSE Ltd (-10%) and MCX (-19%) saw massive crashes because the higher STT is expected to reduce overall trading volumes in the country.
- Advance-Decline Ratio: It was a “textbook” bear day, with roughly 4 stocks falling for every 1 that rose.
This article is for informational purposes only.Content for this article was developed with the assistance of Gemini, a large language model from Google
Disclaimer: This article provides general information based on the budget news and it’s not financial advice . We are not SEBI-registered investment advisors, and this content does not constitute investment advice. Consult your financial advisor before making any investment decision.