- Raising of STT on futures and options may dampen near-term market sentiment
- Shares of brokerage firms fell sharply following the STT hike announcement
- Budget 2026 boosts infrastructure spend to Rs 12.2 lakh crore with new projects
Nilesh Shah, founder of Envision Capital, said the decision to raise the securities transaction tax is likely to dampen market sentiment in the near term, even as the government's sustained infrastructure push offers strong medium- to long‑term tailwinds.
The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, proposes raising STT on Futures to 0.05% from the present 0.02%. The STT on options premium and exercise of options are both proposed to be raised to 0.15% from the present rate of 0.1% and 0.125% respectively.
"The hike on STT is going to impact sentiment for the near term for sure,” Shah said at the panel discussion post budget in the NDTV Profit studio, noting that concerns may also emerge around trading volumes as liquidity remains critical for healthy market functioning.
The market sentiment reflected on Dalal Street as shares of brokerage-related companies nosedived 18%. On the BSE, shares of Multi Commodity Exchange tumbled 18.18% to Rs 2,211.5, while Billionbrains Garage Ventures, the parent company of Groww, plunged 13.85% to Rs 161.65, and IIFL Capital Services declined 17.53% to Rs 306.30 apiece, according to NDTV Profit.
Angel One's stock dropped 13.44% to Rs 2,323.20, and Anand Rathi Share and Stock Brokers depreciated 8.39% to Rs 566.80. The scrip of BSE Ltd also came under heavy selling pressure, diving 15% to Rs 2,551.90 apiece, according to NDTV Profit.
Shah, however, emphasised that the broader budget contains several positives across sectors such as textiles, semiconductors and rare earth minerals. He said there are positive signs because of the government's continued infrastructure push. Capital expenditure on infrastructure has been ramped up to Rs 12.2 lakh crore, alongside fresh announcements on high-speed rail corridors and greater focus on developing waterways.
"To me, the biggest positive here is the continued focus on infrastructure," Shah said. "These are some of the big positives out there," he said.
The Budget outlines several measures to strengthen public infrastructure, including the use of instruments such as Infrastructure Investment Trusts and Real Estate Investment Trusts, and support from institutions like the NIIF and NABFID. Finance Minister Nirmala Sitharaman also reiterated the government's commitment to developing infrastructure in Tier II and Tier III cities with populations above five lakh, positioning them as emerging growth centres.
Shah believes that while markets may react negatively in the short term, the long‑term growth story remains firmly intact.
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