Stock Market Today: Nifty, Sensex Log Worst Budget Day In Six Years As STT Hike Dents Sentiment

That's all for today folks. Before we part for the day, few interesting stories for you to look at:

• Budget 2026 Key Highlights: Big Capex Push, STT Hike, Manufacturing Boost Lead India's Next Growth Wave
• Union Budget 2026: What Gets Cheaper & What Gets Costlier? Check Full List
• Nifty, Sensex Crash On Budget Day — Here's Eight Reasons Why
• Budget 2026: Are You A Salaried Taxpayer? Here's What Changes For You

The Union Budget 2026 brought a major surprise for market participants as Finance Minister Nirmala Sitharaman announced a sharp hike in the Securities Transaction Tax (STT) on derivatives trades. The move, aimed at curbing excessive speculation in the futures and options (F&O) segment, triggered a sharp sell-off in equities and raised concerns across the broking and exchange ecosystem.

As per the Budget proposal, STT on futures has been increased from 0.02% to 0.05%. The impact is even steeper in options, where the tax on option premiums will rise from 0.1% to 0.15%, while STT on the exercise of options will be hiked to 0.15%.

• STT hike another such measure that deters the pace of growth in derivatives speculation, while also augmenting government revenues
• Expect sentiment around the derivatives trading value chain to be soft and some volume impact
• For Nuvama, the higher STT should hurt profitability of market-makers/high-frequency trading outfits
• Insurance sector saw limited attention in the Budget speech
• No big-ticket changes in sector dynamics, or in tax rates for savers
• There was no discussion on insurance commissions, something that featured in the economic survey

Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 in Parliament on Sunday, outlining the government's fiscal roadmap, sectoral allocations and reform measures.

A count of frequently used terms in the speech shows that the phrase ‘Income Tax' appeared the most, featuring 40 times. The word ‘services' was mentioned 34 times, while ‘AI', used as a standalone term, appeared 12 times.

The government's long-term development theme ‘Viksit Bharat' was referenced eight times during the address. The word ‘tourism' was also used eight times.

After an unprecedented rally, gold and silver prices have witnessed a bit of a reality check in the past few days, especially following Donald Trump's announcement of Kevin Warsh becoming the designated success for US Federal Reserve chairman Jerome Powell.

Silver, in particular, has fallen up to 36% from its peak and is down about 8% on Sunday.

Check here for more: Silver Prices Crash: What's Really Happening? Your Complete Infographic Guide

Market veteran Shankar Sharma said he welcomed the Budget mainly because the government raised the securities transaction tax (STT) on derivatives, a move he said could curb futures-and-options activity among retail traders.

“I love this Budget for ONE major reason: hiking of STT on derivatives,” Sharma said in a reaction post on X after the speech. He said derivatives trading had harmed young participants and said the effect would last for years.

Delhivery shares have risen 6% to Rs 449.75 per share. This comes right after the Union Budget on Sunday. In addition, the company's third quarter profit nearly doubles to Rs 40 crore. In addition the revenue rose 18%, contributing to the major rise in the share price in the special budget session.

Gold and silver continued their steep slide on the MCX, with futures tumbling 6% at the open on Feb. 1. Gold ETFs mirrored the decline, tumbling as much as 16% in early trade on Sunday. Gold futures for April delivery fell up to 6%, losing Rs 9,140 per 10 grams to open at Rs 1,43,205. This steep decline follows a nearly Rs 50,000 drop (26%) over just three sessions, after prices touched a record high of Rs 1,93,096 per 10 grams.

Silver futures for March delivery tumbled around 6%, shedding Rs 17,515 per kilogram to open at Rs 2,74,410. Over the last three sessions, the contracts have plunged Rs 1,45,638, or 35%, following a record high of Rs 4,20,048 per kg.

Gold and silver declined sharply as investors engaged in heavy profit-taking, while a stronger US dollar added to the pressure. The market also took note of US President Trump's decision to appoint Kevin Warsh, a former Federal Reserve governor known for his hawkish approach to rate cuts, to lead the central bank.

Bharat Dynamics shares have fallen 10% to Rs 1,384.40 per share. This comes right after the Union Budget on Sunday as the Finance Minister did not make any announcement for the defence sector. In addition, the company's third quarter profit fell 50% to Rs 73 crore. In addition the revenue fell 32%, contributing to the major plunge in the share price in the special budget session.

The government will raise portfolio investment limits, allow individuals resident outside India to invest in equities and introduce a market-making framework for corporate bonds, Finance Minister Nirmala Sitharaman said in her Budget 2026 speech on Sunday.

The proposals also include a comprehensive review of the Foreign Exchange Management framework. Sitharaman said the government “will introduce a market-making framework to promote the corporate bond market,” as part of efforts to deepen participation in debt markets.

The measures mark a shift towards easing entry norms and ownership limits in India's financial markets, especially for overseas investors. By raising portfolio investment caps and widening eligibility, the government is signalling a push to broaden participation in equity and debt markets.

Finance Minister Nirmala Sitharaman has proposed that buyback proceeds for all categories of shareholders will now be taxed as capital gains, moving away from earlier mechanisms that treated different shareholders differently.

Announcing a major change in the taxation of share buybacks in her Budget speech, she explained that under the new structure, corporate promoters will face an effective tax rate of 22%, while non‑corporate promoters will be taxed at 30% on buyback transactions.

Read more: Buyback For All Shareholders To Be Taxed As Capital Gains, Announces FM Sitharaman

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Gold Feb Futures fell 3% at Rs 1.47 lakhj per 10 Gm on the MCX.

Silver March Futures falls 9% at Rs 2.65 lakh per Kg.

Finance Minister Nirmala Sitharaman on Sunday reinforced the government's infrastructure-led growth strategy, proposing capital expenditure of Rs 12.2 lakh crore for FY2026-27, up from Rs 11.2 lakh crore previously.

Presenting the Union Budget, Sitharaman highlighted the sharp rise in public investment over the past decade, noting that capital expenditure has expanded nearly six-fold — from Rs 2 lakh crore in 2014-15 to Rs 11.2 lakh crore in the Budget for FY26.

The finance minister said the government would continue prioritising infrastructure development in cities with populations exceeding five lakh, including tier-2 and tier-3 cities that have emerged as key growth centres.

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Finance Minister Nirmala Sitharaman on Sunday said that all IT services will likely be clubbed under single category with common safe harbour margin of 15.5%.

• Threshold for availing safe harbour for IT services to be enhanced to Rs 2000 crore from Rs 300 crore.
• Safe harbour for IT services to be approved by automatic rule-driven model

   

"The plethora of schemes announced for the textile sector, including the National Fibre Scheme, the Textile Expansion Employment Scheme, the Tex Echo Initiative, Samarth 2.0 and the Mahatma Gandhi Gram Swaraj Initiative will boost India’s competitiveness by improving fibre self-reliance, upgrading traditional textile clusters and promoting sustainable textiles, while also modernising the skilling ecosystem to provide employment opportunities to rural youth," said Crisil.

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L&T shares in focus on Sunday as it is emerging as clear beneficiary of thrust on infra spend on DFC, HSR, City infra, waterways n Rail-port connectivity projects.

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Textile stocks surged in trade after Finance Minister Nirmala Sitharaman announced fresh measures for the sector in the Union Budget 2026, signalling continued policy support for manufacturing, exports and employment generation.

During her Budget speech, Sitharaman stated the government's aim to promote skilling in the textile sector through Samarth 2.0, and proposed to set up mega textile parks in challenge mode. She further announced the launch of Mahatma Gandhi Gram Samaj initiative to support Khadi and handicraft.

The announcement lifted sentiment across textile counters. Kitex Garment led the rally, rising over 6%. Pearl Global advanced nearly 6%, while Arvind gained close to 5%. Export-oriented names such as Gokaldas Exports climbed about 4.5%, and KPR Mill added over 4%. Welspun Living rose more than 3%, while Vardhman Acrylics traded marginally higher.

Read more: Budget 2026: Kitex, Arvind And Other Textile Stocks Jump As FM Signals Continued Policy Support

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Finance Minister Nirmala Sitharaman in the Union Budget 2026 proposeed the National Fibre Scheme for self-sufficiency in the space.

• Propose Textile expansion and employment scheme to modernise textile clusters.
• Aim for Samarth 2.0 to promote skilling in textile sector.
• Propose to set up mega textile parks in challenge mode.
• To launch Mahatma Gandhi Gram Samaj initiative to support Khadi, handicrafts.

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The company dispatched 48,316 units in January 2025.

Domestic passenger vehicle sales were at 70,222 units last month against 48,076 units in January 2025, up 46%, Tata Motors Passenger Vehicles Ltd said in a statement.

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The shares of Meesho were locked in lower circuit after the company announced its third quarter results. The company's loss widened to Rs 491 crore.

Meesho Q3 FY26 (Cons, YoY)

• Revenue up 31.6% at Rs 3,518 crore versus Rs 2,674 crore
• EBITDA loss at Rs 539 crore versus loss of Rs 136 crore
• Net Loss at Rs 491 crore versus loss of Rs 37.4 crore

   

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Shares of IFCI Ltd. are buzzing in trade on Sunday's special trading session as investors rush to buy the company, which indirectly holds shares in National Stock Exchange Ltd. The stock is trading at Rs 60.08, accounting for gains of more than 9% compared to the last closing price of Rs 55.09.

This comes on the back of NSE receiving a No-Objection-Certificate (NOC) for its initial public offering, putting an end to a decade-long wait. This is a favourable outcome for IFCI, which is a government-owned non-banking finance company established to cater to the long-term finance needs of the industrial sector.

The Nifty metal index started the day on a sour note and fell 3% after silver prices crashed on the multi commodity exchange on Sunday. Silver plunged 36% from its all-time high of Rs 4,20,048 per kg to a record low of Rs 2,65,652 per kg on the MCX. 

Continuing on the sharp drawdown over the last two days, silver prices fell again up to 10% on the MCX as the global sell-off in the metals market continues. The MCX silver is currently trading at around Rs 2.65 lakh, accounting for a 9% fall from the last closing price.

Other major metal stocks also dragged with shares of Hindustan Zinc Ltd. trading 11.11% lower at Rs 564 apiece, Hindustan Copper Ltd. plunging over 14% to Rs 586.65, National Aluminium Company Ltd. trading 10% lower at Rs 348.05, and Vedanta Ltd. falling over 5% to Rs 644.80 apiece. 

Gold dipped 9% on Sunday ahead of the Union Budget. The gold rate in India on Sunday is Rs 1,43,330 per 10 gms while the silver rate is Rs 2,75,260 per 1 kg, according the Bullions website.

In Mumbai, the financial heart of the country, 24-carat gold is retailing at approximately Rs 1,38,500 per 10 grams. Kolkata follows a similar trend, with its gold rate reported at Rs 1,38,320. Both cities are ahead of the national capital, Delhi, where the 24-carat rate currently stands at Rs 1,69,880.

The southern markets continue to record the highest figures in the country. Chennai leads the metros with a peak rate of Rs 1,38,910, while Hyderabad and Bengaluru follow closely at Rs 1,38,720 and Rs 1,38,610 respectively, keeping the price gap between the southern hubs and the northern capital distinct.

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Continuing on the sharp drawdown over the last two days, Silver prices fell again Sunday morning, falling up to 10% on the MCX as the global sell-off in the metals market continues.

The Silver MCX is currently trading at around Rs 2.65 lakh, accounting for a 9% fall from the last closing price. The Silver MCX prices are down 36% from record highs, a drawdown that is part of a larger correction in precious metals.

Read more: Silver Extends Fall Ahead Budget 2026; Declines 9% On MCX

At pre-open, the NSE Nifty 50 was trading 13.10 points or 0.05% higher at 25,333.75. The BSE Sensex was 119.19 points higher at 82,388.97.

Here are the top five expectations from the Union Budget 2026:

• Fiscal consolidation approach to be largely maintained
• Greater focus on capex
• GST reforms
• Consumption support
• Increase budget allocation in sectors like defence and railways

Union Budget is a major event for investors and can significantly impact stock market sentiment. While experts pointed there are limited scope for further cuts on the income tax front, any change in the long-term capital gains (LTCG) will likely be a strong boost to the market sentiment.

"In the markets, the 12.5% Long-Term Capital Gains (LTCG) tax has created a "friction of success." We urge a return to the 10% LTCG regime. Taxing inflationary gains discourages the long-term compounding essential for our Viksit Bharat 2047 target of a $30 trillion economy," said Rajeev Gupta, Executive Vice President & Business Head - Third Party Products, Religare Broking Ltd.

It is to be noted that Sunday remains a settlement holiday. Although stock markets will remain open, shares traded on Friday cannot be squared off today because of the disruption to the normal settlement cycle.

Bitcoin fell sharply on Saturday, tumbling below $80,000 to the lowest levels since April 2025 as part of a broader decline for digital assets. The drop came amid thin liquidity and limited buying interest, deepening a drawdown that has erased more than 30% from the world's largest cryptocurrency. 

Bitcoin fell as much as 10% to $75,709.88 during New York afternoon trading hours, while other tokens posted steeper losses. Ether, the second-largest digital asset, shed as much as 17%, and Solana at one point dropped over 17%.

Source: Bloomberg

Defence-linked stocks are likely to remain in focus during the Union Budget 2026 on Feb. 1, as investors factor in a moderate increase in defence outlay and continued emphasis on indigenisation. While the market is not expecting major surprises on headline allocations, attention is firmly on execution momentum, faster order finalisation and clarity on procurement timelines.

Among defence PSUs, companies with strong order books and execution visibility are expected to stay in the spotlight. Hindustan Aeronautics is seen benefiting from its aircraft and engine manufacturing pipeline, while Bharat Electronics remains a key play on defence electronics, radar and communication systems. Bharat Dynamics is also on investors' radar given its role in missile manufacturing, while shipbuilders such as Mazagon Dock Shipbuilders and Garden Reach Shipbuilders are being tracked amid ongoing naval modernisation.

Private sector defence manufacturers are also expected to attract interest as the indigenisation push gathers pace. Larsen & Toubro remains a key beneficiary of large platform and systems integration projects, while Bharat Forge, Data Patterns and Astra Microwave are seen gaining from increased localisation of components, electronics and subsystems.

Jefferies on Bajaj Auto

• Maintain Hold; Cut TP to Rs 9100 from Rs 9200
• Inline Dec-Q
• Positive on Indian 2W demand and expect 8% industry volume CAGR over FY26-28
• Like Bajaj's strong margin performance, but are concerned on market share dip in domestic motorcycles

Citi on Bajaj Auto

• Maintain Sell with TP of Rs 8000
• Q3FY26 Results Broadly In Line; Demand Outlook Buoyant
• Focus is on further expanding the Pulsar brand
• Positively surprised by mgmt.'s commentary on EVs
• Bajaj has broken even at Ebitda level in E2Ws
• E3W EBITDA margin is double-digits
• This is commendable esp given Bajaj has also been gaining market share in EVs

MS on Bajaj Auto

• Maintain Underweight; Hike TP to Rs 8782 from Rs 8137
• Q3 – inline quarter
• Sustaining momentum after the GST rate cut
• Expects double-digit growth in domestic motorcycles in Q4
• Introduced seven new interventions in the Pulsar portfolio and expects eight or more over the next four months
• No timeline yet for the non-Pulsar brand launch
• E2W portfolio is well covered with the launch of Chetak 25
• EV revenues are now 25% of domestic revenues
• Commodity headwind could be 50 bps in Q4
• Bajaj has passed on half of this through pricing; the currency tailwind will also offset

Railway-linked stocks are expected to remain in focus around the Union Budget 2026, amid expectations of continued government spending on infrastructure and policy continuity in the railways sector. While markets are not anticipating major surprises on the allocation front, analysts believe sustained capital expenditure will continue to support select railway stocks, particularly those aligned with execution, safety upgrades and capacity expansion.

Positive sentiment around railway equities is underpinned by the broader infrastructure thrust outlined in the Economic Survey, which points to record capital outlays, rapid network expansion and near-universal electrification. Railway capital expenditure is projected to rise by around 15% in FY26, reinforcing the government's corridor-led approach to capacity creation, asset modernisation and multimodal connectivity.

Read more: Budget 2026: Railway Stocks In Focus As Capex Push, Policy Continuity In Spotlight

Finance Minister Nirmala Sitharaman will present her ninth consecutive Union Budget today in the Lok Sabha today. The speech will be telecast live at 11:00 a.m. across the country. The country's most important financial document will be released at a time when the world's fastest-growing major economy has managed to withstand prohibitive US tariffs. 

Follow Budget 2026 Live Updates here.

• Nifty Feb futures is down 0.44% to 25,425 at a premium of 105  points.
• Nifty Options 3rd Feb Expiry: Maximum Call open interest at 26,000 and Maximum Put open interest at 24,000.
• Securities in ban period: SAMMAANCAP

The US and Asian markets were closed for trading on Saturday and Sunday. 

 US and European index futures are trading mixed.

• S&P 500 futures are down 0.43%.
• Euro Stoxx 50 futures up 0.95%.

The GIFT Nifty was trading near 25,400 early on Sunday. The futures contract based on the benchmark Nifty 50 rose 0.06% at 25,420 as of 6:38 a.m. indicating a flat start for the Indian markets.

In the previous session on Friday, the benchmark snapped its three-day gaining streak. The Nifty ended 98.25 points or 0.39% lower at 25,320.65 and Sensex ended 296.59 points or 0.36% lower at 82,269.78.