Budget 2026 stock market crash: Sensex dips 2,800pts, Nifty 869pts intraday

Budget 2026 impact: The Sensex and the Nifty crashed over 3 per cent each from the respective day's high after FM proposed to hike STT on F&O trading. RIL and SBI were the major laggards.

Equity benchmark indices erased gains, and took a sharp plunge in Sunday's Budget day special trading session after the finance minister Nirmala Sitharaman announced a hike in Securities Transaction Tax (STT) in the futures & options segment.  The finance minister proposed to hike STT on futures trading to 0.05 per cent from 0.02 per cent; and 0.15 per cent as against 0.10 per cent as of now.  The BSE Sensex touched an intra-day high at 82,727 after Sitharaman started her Budget speech, and proposed measures for railways and textile related sectors. The Sensex, however, erased gains and tumbled to a low of 79,899 - down 2,828 points or 3.4 per cent from the day's high following the STT hike.  Similarly, the NSE Nifty plunged to a low of 24,572 - down 869 points or 3.4 per cent from the day's high of 25,442.  The Sensex eventually ended the day with a loss of 1,547 points or 1.9 per cent at 80,723, and the Nifty at 24,825 - down 495 points or 2 per cent.    The STT hike is likely to have a negative impact on the market sentiment in the near-term, believe analysts.  "Initial optimism faded quickly as higher transaction costs driven by the increase in Securities Transaction Tax (STT) on equity derivatives—and the lack of strong measures to revive foreign capital inflows weighed on sentiment and near-term liquidity expectations," says Ponmudi R, CEO of Enrich Money.  While the Budget reaffirmed long-term intent through record infrastructure spending and a manufacturing push, the market response signalled near-term disappointment, with participants choosing to book profits and reassess risk amid fiscal and policy clarity gaps, the analyst added.    "The increase in Securities Transaction Tax (STT) is likely to act as a marginal negative for foreign portfolio investor (FPI) flows in the near term, particularly for high-frequency and derivative-focused global funds," says Aakash Shah, Technical Research Analyst at Choice Equity Broking.  ALSO READ | Derivatives trading to get costlier: STT on options premium raised to 0.15%  FPIs have been cautious — with equity outflows of over ₹41,000 crore in January alone amid a global risk-off sentiment. The analyst fears that higher STT further reduces post-tax returns, making India relatively less competitive for short-term and derivative-oriented foreign flows.  "At the margin levels, higher transaction costs could tilt some global allocators towards other Asian markets, especially at a time when India is already facing pressure from AI-led capital shifts to the US, Taiwan and Korea," explains Shah.  Overall, while the STT hike may help boost tax collections, it risks dampening trading volumes and could slow tactical FPI participation, Shah added.  Meanwhile, Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments belives that STT hike is to discourage retail traders from F&O where 92 per cent have been losing money according to SEBI. 

Sensex movers & shakers

SBI and Reliance Industries were the major draggers on the BSE Sensex, accounting for a loss of around 210 and 170 points respectively. SBI stock traded with a loss of 5.5 per cent at ₹1,020, while Reliance shares slipped 2 per cent to ₹1,366.  Bharat Electronics (BEL) was the top per centage loser among the Sensex 30, down 8 per cent at 413 levels. NTPC, HCL Technologies and Tata Steel dropped around 4 per cent each. Bajaj Finance, Adani Ports, Eternal, Titan, Larsen & Toubro, Asian Paints, Power Grid Corporation, Maruti and Bharti Airtel were also down over 2 per cent each.  In the broader market, the BSE MidCap index slipped over 2 per cent, and the SmallCap was down 1.7 per cent. The overall market breadth was also negative, with over 2,200 stocks declining as against 1,700 shares on the BSE.