- India's benchmark indices fell nearly 3% during the special Budget session on Sunday
- Nifty dropped below 24,600 and Sensex declined over 1,000 points during the session
- STT on futures increased from 0.02% to 0.05% and on options premiums from 0.1% to 0.15%
India's benchmark indices fell nearly 3% in the special Budget session on Sunday extending the decline for the second straight day. Nifty fell below 24,600, while Sensex was down over 1,000 points. The broader segment of the market was also negative, with the Nifty Midcap 100 falling 1.83% and Smallcap 250 index slipped 2%.
Nifty 50 fell 2.96% to 24,571.75 level, while Sensex was down 2.88% to 79,899.42. Volatility index VIX rose over 10% on Sunday.
Here is what left the D-street unimpressed:
Increase in STT for F&O
Finance Minister Nirmala Sitharaman during the Union Budget 2026 announced a hike in the Securities Transaction Tax (STT) on derivatives trades. As part of the proposal, which is aimed at curbing speculative trading in the high-volume futures and options (F&O) segment, STT on futures will be raised from 0.02% to 0.05%. The impact on options is even more pronounced, with tax on option premiums set to increase from 0.1% to 0.15% while the STT on the exercise of options will rise from 0.125% to 0.15%.
ALSO READ: BSE Shares Hit Lower Circuit As Nirmala Sitharaman Makes Key F&O Announcement
No Major Announcement On Defense
While everyone expected an announcement, the Finannce Minister did not mention any major announcements during the session. However this sent the defence stocks into the red zone. However, in the document released by the Finance Minsitry, capital outlay for defence was at Rs 2.2 lakh crore, 22% higher than Rs 1.8 lakh crore for fiscal 2026.
PSU Banks Tumble
Shares of public sector banks declined on Sunday, led by losses in Bank of India, Bank of Baroda and Indian Bank, after Finance Minister Nirmala Sitharaman outlined plans to set up a new committee to review the banking and finance sector.
In addition, there were expectation by the market that the government will increase FII limit, but no announcements came.
ALSO READ: PSU Bank Shares Slide After Proposal For Banking Review Panel
Capex For FY27 Lower Than Estimates
According to Crisil, the Rs 12.2 lakh crore budget outlay for capital expenditure marks an 8.9% increase over the current fiscal and is in line with expectation, albeit lower than the likely need. This also means private sector investments need to accelerate in the core infrastructure space. Expect asset monetisation to be focus for crowding in private investments over the medium term.
Volatility In Metals
The sharp correction in commodities continued on Sunday further pushing the market. While silver on the MCX fell 9%, while gold futures were down 3%.
Additionally, there were no major surprise in January GST numbers and Rupee still continues to be weak. Amid the global uncertainity the overhand of US-India trade completion continues to remain a dark cloud.
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