Thank you for following our live market coverage on Budget Day. Stay tuned for more updates, insights, and analysis from the markets!

Bharat Electronics dragged the NIFTY50 index, closing 6.02% lower, as the 2026-27 Budget failed to enthuse investors and dashed their hopes of higher spending on the defence sector, with an outlay of ₹7.85 lakh crore in FY27 (up 15%).

“The 10.9% growth in capital expenditure for FY27 reflects the Government’s sustained commitment to the vision of Viksit Bharat 2047. With capital outlay increased to ₹12.2 lakh crore and continued investments across transport, railways, energy and manufacturing, the Union Budget provides strong demand visibility for steel-intensive segments."

"The added focus on strengthening Tier II and Tier III cities through modern infrastructure, water supply and essential amenities is clearly positive for companies like ours, given our presence in steel pipes, power transmission poles and crash barrier manufacturing—key enablers of India’s expanding infrastructure network.”

“The Budget reinforces confidence in India’s financial ecosystem and signals continued support for inclusive and sustainable growth. With clear targets for credit expansion, technology adoption, and reforms in banking and NBFCs, there is a clear direction to scale responsibly."

"The emphasis on infrastructure development in Tier II and III towns will act as a catalyst towards creating opportunities for the underserved and unserved communities in these markets, meet the growing urbanisation needs, and create meaningful impact for communities across India. This will further strengthen the housing for all missions and spur demand for affordable housing.”

“The Union Budget seeks to simultaneously address the medium- and long-term challenges and opportunities presented by the evolving global geopolitical and economic landscape – expanding the manufacturing focus along with heavy engineering, semiconductors, electronic components, rare earths, chemicals, and data centres. Infrastructure focus is sharper with a focus on urban infra and healthcare.

The fiscal math is backed by reasonable assumptions, even though the overall investment outlay and fiscal deficit seem marginally worse than was expected. In the wake of higher STT on futures & options and no relief on capital gains, corporate earnings growth in the coming quarter and FY27 will become even more critical for the equity market outlook over the next 12-18 months.”

SENSEX tanks 1,546.84 points, or 1.88%, to settle at 80,722.94 levels. NIFTY50 index ended at 24,825.45, down 495.20 points, or 1.96%.

Shares of defence equipment makers were trading sharply lower in Sunday's special Budget trading session after the government increased its spending on defence to ₹7.85 lakh crore for financial year 2026-27 from the previous year's budget estimate of ₹6.81 lakh crore, up 15%.

The stock market is trading deep in the red following the Budget 2026 presentation.

“The Union Budget 2026 is focused on infrastructure, inclusion, and industry – to support the Government’s audacious vision for a Vikasit Bharat by 2047. The focus on developing city economic regions to drive regional growth and urban development, and more importantly, expanding market-based funding options for urban local bodies, has huge potential for harnessing their fiscal independence and project investment capabilities.

Besides, the sustained thrust on the AMRUT scheme and focus on developing newer tier 2 and 3 towns will further boost the demand for water management and infrastructure services across the country.”

Defence stocks were trading deep in the red in the afternoon session.

Shares of the Multi-Commodity Exchange of India (MCX) plunged as much as 19.18% to an intraday low of ₹2,068.50 apiece on the National Stock Exchange (NSE) on the special Budget trading session on Sunday, February 1.

It registered the worst single-day decline since March 2020 in early trade on Sunday.

While it recovered from the day’s low, it was still trading in the red. The stock was at ₹2,259.40 per unit, down by 10.63% as of 12:58 pm.

The scrip has declined 3% in the past week and more than 1% over the month.

While the stock hit a 52-week high of ₹2,705 on January 29, 2026, it reached a year’s low of ₹881.63 per unit on March 11, 2025.

Shares of data centre and AI companies rallied in the special session on Sunday after Finance Minister Nirmala Sitharaman announced a long-term tax initiative aimed at encouraging foreign companies to expand cloud services in India in the Union Budget 2026.

Shares of information technology were outperforming in Sunday's volatile special budget session. The NIFTY IT index touched an intraday high of 38,699 after hitting an intraday low of 37,297.55 as the government increased the threshold for availing safe harbour for IT services from ₹300 crore to ₹2,000 crore.

"The Budget provides continuity in the form of fiscal prudence while maintaining thrust on reforms. Net market borrowing at ₹11.7 lakh crores is broadly in line with market expectations, with the government scoring on its commitment to fiscal consolidation with the fiscal deficit budgeted to fall to 4.3% in FY 2027 from 4.4% in FY 2026 under the broader goal of achieving a debt-to-GDP ratio of 50 +/- 1% by FY 2030-31.

The budget also scores on continued front-loading of government capex at a time when policy transmission has been lagging. The announcement on the Market Making Framework for Corporate Bonds and the introduction of Total Return Swaps reaffirm the government’s commitment towards deepening Corporate Bond Markets."

The government on Sunday proposed to accelerate "recycling" of real estate assets owned by Central Public Sector Enterprises (CPSEs) through the setting up of dedicated real estate investment trusts (REITs).

REITs are investment vehicles that own or operate income-generating real estate, enabling investors to earn a share of the income produced without directly purchasing properties.

In her Budget speech, Finance Minister Nirmala Sitharaman said, "Over the years, REITs have emerged as a successful instrument for asset monetisation. I propose to accelerate recycling of significant real estate assets of CPSEs through the setting up of dedicated REITs".

At present, there are five listed REITs in India - Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, Nexus Select Trust, and Knowledge Realty Trust.

Nexus Select Trust is backed by rent-yielding retail real estate (shopping malls), while the other four are office REITs.

• On selling futures, STT rises from 0.02% to 0.05%

• On selling options, STT increases from 0.10% to 0.15%

• On option exercise at expiry, STT goes up from 0.125% to 0.15%

This does hurt arbitrage fund returns (by roughly 0.5% annually), but even after the impact, they remain tax-efficient, the market expert says.

For AI and digital companies, the Budget’s impact is structural rather than tactical. The focus on digital public infrastructure, data platforms, skilling, and compute access expands the addressable market for AI applications across government, BFSI, healthcare, and manufacturing.

"Large IT services companies such as TCS, Infosys, and HCLTech benefit from rising enterprise AI adoption in automation, analytics, and cloud-led transformation, while mid-tier digital engineering firms gain from specialised AI deployment," says Sonam Srivastava, Founder and Fund Manager at Wright Research PMS.

The more important second-order effect is data creation.

"As capex, financial inclusion, and formalisation expand, data intensity across the economy rises, creating sustained demand for AI-driven optimisation. This positions India as an AI application and services hub rather than a frontier model developer. For markets, that means steady, compounding earnings opportunities rather than speculative spikes, which aligns well with the risk profile of listed technology companies," it added.

Finance Minister Nirmala Sitharaman on Sunday said buyback proceeds for all types of shareholders will be taxed as capital gains.

The equity benchmark indices slipped into the red after the Finance Minister announced a hike in the Securities Transaction Tax (STT) in the derivatives segment. STT on futures will increase from 0.02% to 0.05%, while STT on options premiums will rise from 0.10% to 0.15%.

The S&P BSE SENSEX tumbled over 2,000 points, or nearly 3% during the session before recovering a bit. NSE’s NIFTY50 was trading at 24,888.60, down 432.05 points, or 1.71%.

Union Budget 2026: Finance Minister announces increase in STT on futures to 0.05%. The stock market was trading in the red following the anouncement.

Budget proposes tax holiday till 2047 to foreign companies that provide cloud services to customers globally by using data centres in India.

Finance Minister Nirmala Sitharaman on Sunday said individual persons residing outside India (PROI) will be permitted equity investments in listed Indian companies through a portfolio investment scheme.

She also proposed raising the investment limit for PROIs to 10% from 5%.

The finance minister also proposed making a framework with suitable access to funds and derivatives on corporate bond indices.

The government will continue to focus on developing infrastructure in cities with over 5 lakh population, she added.

Presenting the Union Budget 2026-27, Sitharaman proposed to upgrade the WHO Global Traditional Medicine Centre at Jamnagar, Gujarat, while also stating that the country's telescope infrastructure will be upgraded to promote astrophysics and astronomy.

Shares of aquaculture companies were witnessing buying interest in Sunday's special Budget session. Shares of Avanti Feeds, Apex Frozen Foods, Coastal Corp, Waterbase, Zeal Acqua, and BKV Industries rose between 1% and 6.5% after the finance minister, Sitharaman, said that the government will take initiatives for the integrated development of 500 reservoirs and Amrut Sarovars.

"We will undertake initiatives for integrated development of 500 reservoirs and Amrut Sarovars to strengthen the fisheries value chain in coastal areas and enable market linkages involving start-ups and women-led groups together with fish farmer producer organisations," Sitharaman said while presenting the Budget 2026.

Shares of electronic manufacturing companies rose up to 6% after Finance Minister Nirmala Sitharaman on Sunday proposed to increase the outlay on electronics manufacturing to ₹40,000 crore in 2026-27.

The stock of Syrma SGS Technology jumped 5.95% to ₹806.35, Dixon Technologies (India) Ltd climbed 4.21% to ₹10,885, and Kaynes Technology India rose 3.82% to ₹3,608.90 apiece on BSE.

In addition, PG Electroplast's shares increased by 2.59% to ₹561.75 per piece, DCX Systems rose 2.06% to ₹180.95, and Cyient DLM's by 1.04% to ₹379.70 apiece on the bourse.

Presenting the Union Budget for 2026-27, Finance Minister Nirmala Sitharaman said high-tech tool rooms will be established at two locations to give a push to capital goods manufacturing.

Infrastructure stocks were trading in the green as Finance Minister Nirmala Sitharaman on Sunday said the target for capex will be raised to ₹12.2 lakh crore for FY27 from ₹11.2 lakh crore earmarked for the current fiscal year and announced a slew of measures to boost infrastructure in the country.

Presenting the Union Budget for 2026-27 in the Lok Sabha, she said the government will continue to develop infrastructure in Tier-2 and Tier-3 cities.

The government also proposes to set up a risk guarantee fund for the infrastructure sector, she added.

A scheme for the enhancement of construction and infrastructure equipment will be introduced to strengthen domestic manufacturing, Sitharaman said.

Textile stocks such as Indo Count Industries, Trident, among others, were trading with sharp gains after the FM proposed the setting up of mega textile parks with a focus on value addition to technical textiles.

Pharma stocks were trading higher as Finance Minister Nirmala Sitharaman announced the BioPharma Sakti scheme, with an outlay of ₹10,000 crore over a five-year period, in the Union Budget 2026.

Nifty Pharma was up 0.89%, led by Biocon, Sun Pharma, Piramal Pharma, Torrent Pharma, and Dr Reddy’s Laboratories.

Finance Minister Nirmala Sitharaman on Sunday proposed a ₹10,000 crore investment in the biopharma sector over the next five years, a move which would give a boost to the country's pharmaceuticals industry.

Biopharmaceuticals, or biologics, are complex medicines manufactured from living organisms, cells, or tissues rather than through chemical synthesis.

The Finance Minister has started her Budget 2026 Speech. SENSEX and NIFTY trade in the green.

The equity benchmark indices are trading in the green ahead of the Union Budget 2026-27 presentation.

• Total sales: 71,066 units, up 47% year-on-year (January 2025: 48,316 units).

• Domestic passenger vehicle sales: 70,222 units, up 46% from 48,076 units in January 2025.

The gold prices have recouped the majority of the losses on Sunday. The MCX gold contract for March traded ₹1,40,200 per ounce, up from an intraday low of ₹1,36,185 per ounces.

Consequently, the gold ETFs have also bounced back from intraday low levels. Goldbees are trading 6.2% lower vs -11% earlier. Axisgold ETF has jumped nearly 6% from intraday lows

Apollo Hospitals Enterprise’s Promoter Director and Executive Chairperson of Apollo HealthCo, Shobana Kamineni, drew the attention of the government towards supporting preventive healthcare.

She said, ‘A Viksit Bharat will be built on a healthy youth and workforce—nearly one billion strong by 2047. A prevention-first healthcare system, powered by mandatory check-ups, digitised records, and UPI-style data portability, can unlock early risk detection, personalised care, and long-term productivity at scale’. She further said, ‘As India led the world in digital payments, preventive healthcare can be our next global export.’

• Total sales: 73,137 units, up 11.5% year-on-year (January 2025: 65,603 units).

• Domestic sales (dispatches to dealers): 59,107 units, up 9% from 54,003 units in January 2025.

• Exports: 14,030 units, compared with 11,600 units in January 2025.

• Comment from Hyundai MD & CEO Tarun Garg:

“Achieving our highest-ever monthly domestic sales of 59,107 units, alongside highest-ever total sales of 73,137 units with a strong 11.5% year-on-year growth, reflects not only Hyundai's brand leadership but also the collective strength of our people, partners and customers.”

Defence stocks remained in the spotlight on Sunday, February 1, ahead of the Union Budget 2026–27, amid high expectations for the sector following the India-EU deal and encouraging Q3 results from key companies.

Shares of Bharat Electronics (BEL), Mazagon Dock, Garden Reach Shipbuilders & Engineers (GRSE), Data Patterns, Cochin Shipyard, Paras Defence, Hindustan Aeronautics, and Bharat Dynamics are likely to attract investor attention. Market participants are closely watching the Budget for any allocations and policy announcements affecting the sector.

Gold, silver prices hit lower circuit levels in futures trade ahead of Union Budget 2026-27 presentation.

Shares were trading 15% lower in the early trade.

MCX Gold and Silver saw a substantial fall last week amid multiple headwinds in global markets. MCX Gold February futures tumbled 11.6% on Friday and are down 6% on Monday morning to trade around ₹1,40,674 per 10 gram.

Meanwhile, MCX Silver March future declined 27% on last Friday and is down another 6% on Sunday morning to trade around ₹2,74,410 per kg ahead of Budget 2026.

Shares were trading with deep cuts

The metal stocks were under selling pressure following a sharp decline in commodity prices.

At 9:17 am, the S&P BSE SENSEX was trading at 82,185.39, down 84.39 points, or 0.10%. The NIFTY50 was at 25,283.70, lower by 36.95 points, or 0.15%.

SENSEX up over 100 pts, NIFTY hovers over 25,300

Gold futures for delivery on February 5 dropped 6% to hit an intraday low of ₹1,40,674 per 10 grams, and silver futures for delivery on March 5 tumbled 6%, or ₹17,515 to ₹2,74,410 per kilogram, data from MCX showed.