Indian equity markets ended the session sharply lower on February 1, 2026, as benchmark indices faced intense selling pressure. The NSE Nifty 50 dropped 495.20 points, or 1.96%, to close at 24,825.45, while the BSE Sensex declined 1,546.84 points, or 1.88%, finishing at 80,722.94.
Investor sentiment turned negative following the Union Budget 2026, which fell short of market expectations. Traders reacted to the Finance Minister’s announcement of a hike in the Securities Transaction Tax (STT) on futures trading to 0.05% from 0.02%, increasing the cost of derivative transactions. Sentiment was further dampened by the government’s move to tax proceeds from share buybacks as capital gains across all shareholder categories.
Broader market indices also witnessed steep losses. Key NSE indices such as the Nifty Next 50, Nifty Bank, Nifty Financial Services, and Nifty Midcap Select each plunged by more than 2% during Sunday’s trading session.
Despite the sharp decline, several market observers maintain that the Union Budget 2026–27 remains supportive of long-term economic growth, citing its emphasis on fiscal discipline and structural reforms. Some analysts view Sunday’s selloff as a short-term, reactionary move rather than a shift in fundamentals.
Commenting on the near-term outlook, Kranthi Bathini, Equity Strategist at WealthMills Securities, said that the market could remain under pressure on Monday as well, although selective buying at lower levels is likely to emerge.
