Equity Markets See Sharp Sell-Off Post Budget
Indian equity markets witnessed a sharp sell-off on Sunday, February 1, immediately after Finance Minister Nirmala Sitharaman presented her ninth consecutive Union Budget, triggering investor anxiety despite the government’s emphasis on growth with fiscal discipline.
Benchmark indices ended deep in the red as markets reacted negatively to the proposed hike in Securities Transaction Tax (STT). The Sensex plunged 1,547 points, or 1.88 per cent, to settle at 80,722.94, while the Nifty 50 declined 495 points, or 1.96 per cent, closing at 24,825.45. Broader markets mirrored the weakness, with the BSE 150 MidCap Index falling 1.91 per cent and the BSE 250 SmallCap Index sliding 1.61 per cent.
The sharp correction wiped out nearly ₹10 lakh crore of investor wealth in a single trading session. Overall market capitalisation of BSE-listed companies fell to ₹450 lakh crore from ₹460 lakh crore in the previous session, underscoring the intensity of the sell-off.
Within the 30-share Sensex basket, only four stocks—TCS, Infosys, Sun Pharma and Titan—managed to close in positive territory. Heavyweights such as SBI, Adani Ports and BEL emerged as the biggest laggards, each shedding more than 5 per cent.
Sectoral indices faced broad-based pressure. Nifty PSU Bank cracked 5.57 per cent, while the Metal index tumbled 4.05 per cent. Nifty Oil & Gas, Financial Services, Auto, FMCG and Realty indices declined over 2 per cent each. The Nifty Bank index also slipped 2 per cent to close at 58,417.20.
Market experts, however, advised investors not to read too much into the immediate reaction. They noted that the Budget deliberately steered clear of populist giveaways and instead reinforced a long-term growth roadmap.
“The 2026 Budget prioritises competitiveness over populism, aiming to sustain India’s growth at 6.5–7 per cent while attracting global manufacturing and capital investment. It signals a shift from consumption-led to investment-driven expansion,” said Pradeep Gupta, Chairman and Managing Director, Anand Rathi Share and Stock Brokers. He added that the Budget offers long-term structural opportunities across infrastructure, manufacturing, financials and capital markets over the coming decade.
