Indian equities traded on Sunday, 1 February 2026 for a special Budget Day session. The market initially rallied as the Finance Minister’s Union Budget speech focused on infrastructure spending, social schemes and tax stability. However, a sharp increase in the securities‑transaction tax (STT) on futures and options unnerved traders. Combined with profit‑booking and weak global cues, the indices erased early gains and closed sharply lower. Information‑technology and healthcare stocks provided relative support, while metals, PSU banks and energy names led the decline.
Major indices
Index
1 Feb 2026 close
Change
Key notes
Nifty 50
24,825.45
↓ 495.20 pts (–1.96 %)
slipped below 24,900 as derivatives‑tax hike triggered broad selling; intraday high ~25,442 and low ~24,572
BSE Sensex
80,722.94
↓ 1,546.84 pts (–1.88 %)
crashed from an intraday high near 82,727 to a low of ~79,899
Nifty Bank
~59,300
↓ ~2.0 %
PSU banks under pressure; SBI fell ~5 %
Nifty IT
~38,650
↑ ~0.6 %
only major sector index to finish positive; Wipro and TCS gained
Nifty Midcap 150
~16,270
↓ 2.2 %
broader markets underperformed
Nifty Smallcap 250
~12,160
↓ 2.8 %
small‑caps slumped as risk appetite waned
Advance–decline: ~1,673 stocks advanced against ~2,299 declines, indicating weak market breadth. Trading turnover surged due to heightened Budget‑day activity. Foreign institutional investors were net sellers (gross purchases ~₹7,850 crore; sales ~₹7,561 crore, net selling around ₹290 crore), while domestic funds were marginal buyers.
Sector performance
Sector index
Direction (approx.)
Drivers
Information Technology
▲ (~+0.6 %)
Defensive buying in large‑cap IT (Wipro, TCS) after muted guidance but stable budgets; rupee weakness aided export earnings
Pharmaceuticals/Healthcare
▲ (~+0.3 %)
Buying in Max Healthcare, Cipla and Sun Pharma as investors sought defensive plays
FMCG
flat to ↓ (~–0.3 %)
Stable consumption outlook offset by profit‑taking
Banking & Financials
↓ (~–2 %)
PSU banks slumped; SBI dropped >5 % after STT hike dampened derivatives trading and raised cost of capital; private banks also fell on profit‑booking
Metals & Mining
↓ (~–2.5 %)
Hindalco fell ~5.8 %; global commodity weakness and cautious Chinese demand outlook
Energy/Oil & Gas
↓ (~–2 %)
ONGC declined ~5.5 % as crude prices were volatile and the Budget offered little relief on fuel taxes
Infrastructure & Logistics
↓ (~–2 %)
Adani Ports lost ~5 %; traders booked profits despite infrastructure push in Budget
Top gainers and losers (large‑cap segment)
Top gainers
Price (₹)
% change
Notes
Wipro
241.93
+2.12 %
IT major rallied on renewed interest in tech stocks; traded between ₹235.44 and ₹247.23
Max Healthcare
974.25
+1.82 %
Defensive buying in healthcare amid volatility
TCS
3,178.20
+1.74 %
Optimism on FY26 order pipeline; stock touched ₹3,234 intraday
Cipla
1,343.00
+1.44 %
Pharma stocks saw steady accumulation
Sun Pharma
1,609.00
+0.86 %
Recovered from intraday lows as investors sought defensives
Top losers
Price (₹)
% change
Notes
Bharat Electronics (BEL)
421.95
–6.02 %
Heavy volumes (>10 crore shares); profit‑booking despite defence allocations in Budget
Hindalco Industries
907.00
–5.78 %
Metals sold off amid global commodity concerns
Oil and Natural Gas Corporation (ONGC)
254.20
–5.50 %
Energy stocks under pressure with crude volatility and lack of sector incentives
State Bank of India (SBI)
1,020.00
–5.31 %
Costly STT hike on derivatives and profit‑booking hit PSU banks
Logistics and infra names slipped despite infrastructure spend in Budget
What moved the market
Budget‑day volatility: The Union Budget delivered higher capital expenditure, infrastructure outlays and tax stability, which initially lifted sentiment. However, the proposal to increase the securities‑transaction tax (STT) on futures to 0.05 % (from 0.02 %) and on options premium to 0.15 % (from 0.10 %) triggered a sharp sell‑off. Derivatives traders faced higher transaction costs, prompting unwinding of positions. The market fell more than 3 % from intraday highs before trimming some losses by the close.
Profit‑booking in cyclicals: Traders took profits in public‑sector banks, metals and energy stocks after a strong run‑up into the Budget. PSU banks, which had rallied in anticipation of government capital support, reversed sharply.
Defensive rotation: Information‑technology and healthcare names attracted buying as investors sought stability amid uncertainty. The weaker rupee and global tech resilience supported IT stocks.
Weak global cues: Overseas markets were jittery due to geopolitical tensions and US tariff threats on European goods that were set to take effect from 1 February 2026. Global investors moved to safe‑haven assets, leading to risk‑off sentiment in emerging markets. Asian markets were mixed as China’s growth concerns persisted, and US futures were down modestly.
Global cues
United States: Wall Street closed lower on Friday amid fears of a trade war after the US administration threatened tariffs on multiple European countries starting 1 Feb 2026. S&P 500 futures fell ~0.8 %, and investors rotated into gold and bonds. Strong US bank earnings limited the downside.
Europe: European equities weakened as energy and metal stocks declined. The euro depreciated against safe‑haven currencies. Focus remained on inflation data and the US tariff announcement.
Asia: Most Asian markets were cautious. Chinese equities were subdued due to regulatory concerns and weak economic data; Japanese shares were volatile amid yen strength. Crude oil prices fluctuated around US$78–80 per barrel, keeping energy stocks under pressure.
Stocks to watch (2 Feb 2026)
Theme
Stocks to watch
Rationale
Budget beneficiaries
Larsen & Toubro, KNR Construct, IRFC
Increased infrastructure spending could support order inflows for construction, railway and capital‑goods companies
IT resilience
Wipro, TCS, Infosys
Defensive demand and weaker rupee may extend gains; watch management commentary after earnings
Healthcare/pharma
Max Healthcare, Cipla, Dr Reddy’s
Defensive positioning could continue as volatility persists
PSU banks
SBI, Bank of Baroda, PNB
Oversold after sharp fall; may see technical bounce but remain sensitive to bond yields and FII flows
Metals & energy
Hindalco, Tata Steel, ONGC, Coal India
Global commodity prices and China data to dictate moves; watch for bargain‑hunting after steep declines
New‑age & payments
One 97 Communications (Paytm)
Budget’s digital‑payment incentives and potential FDI limit increase could drive interest; stock was volatile during Budget day
Corporate updates
Union Budget highlights: The government announced a 14 % increase in capital expenditure, focusing on roads, railways, defence and green energy. Personal income‑tax slabs remained unchanged, and fiscal deficit for FY27 was targeted at 4.7 % of GDP, signalling fiscal prudence. Disinvestment receipts were budgeted at ₹50,000 crore, with strategic sales in select PSUs on the table.
Regulatory changes: In addition to the STT hike, the Budget proposed to allow greater participation of non‑resident Indians (NRIs) in Indian equity markets by increasing the overall foreign investment limit in listed companies to 10 %, subject to board approval. It also raised allocations to the defence sector, renewable energy and healthcare.
Earnings season: Several companies are set to release quarterly results in the coming week. HDFC Bank and ICICI Bank reported robust net interest income growth last week. Tata Steel, Power Grid and Hero MotoCorp are scheduled to report in the next few days; investors will watch for management commentary on margins and demand.
Corporate actions:Adani Ports announced the acquisition of an additional stake in a logistics subsidiary, while Bharat Electronics signed a memorandum of understanding with a foreign defence manufacturer during the Aero India expo. NTPC outlined plans to add 5 GW of renewable capacity over the next two years.
Technical levels and outlook for 2 Feb 2026
The Budget‑day sell‑off pushed the indices below short‑term moving averages, leaving the near‑term trend fragile. However, oversold momentum indicators suggest the possibility of a technical bounce.
Nifty 50: immediate support lies at 24,550–24,500; a break could extend declines to 24,300. Resistance is seen at 24,950–25,100 (gap area from Budget day) and then 25,400. Momentum indicators (RSI near 45) suggest consolidation.
Bank Nifty: support at 59,000 followed by 58,300; resistance around 59,800–60,200. PSU banks may lead recovery if bond yields stabilise.
Sensex: support around 80,000 with deeper support near 79,500; resistance at 81,500–82,000.
Expected tone
For Monday, 2 February 2026, the market tone is likely to be cautious. Investors will absorb the finer details of the Budget and monitor global developments, particularly the US–Europe tariff situation and China’s growth data. A relief rally is possible if global markets stabilise and bargain‑hunting emerges, but higher derivatives transaction costs and persistent FII selling could limit upside. Traders should expect continued volatility and use pullbacks to adjust positions.
