The Indian benchmark indices closed lower on Sunday during the special budget trading session after Union Finance Minister Nirmala Sitharaman’s Budget speech as the Sensex declined 1,790.05 points to end trade at 80,479.73, while the Nifty tumbled 495.20 points to close at 24,825.45 at 3:30 PM.
In the 30-share BSE Sensex, among the top gainers were stocks like TCS, Sun Pharmaceuticals, Infosys. Meanwhile, the laggards included Kotak Bank, IndiGo, Titan, HCLTech and HDFC Bank, among others.
In the broader markets, the Nifty Smallcap 100 tumbled 2.73 points as volatility remained extremely high. Sectorally, the Nifty PSU Bank declined 5.57 per cent.
Previously, during the morning session, the BSE Sensex rang the opening bell near 82,200, slipping 34 points, and the NSE Nifty50 breached 25,300, taking a hit of close to 50 points, at 9:15 AM.
Budget Shock Sends Dalal Street Into A Tailspin
What began as a keenly anticipated Budget Day quickly turned turbulent for Dalal Street. Minutes after Finance Minister Nirmala Sitharaman presented the Union Budget 2026–27, equity markets plunged sharply, wiping out thousands of crores in investor wealth.
The BSE Sensex crashed over 2,300 points at its lowest point post the Budget speech. By 12:30 pm, the index was trading near 80,700, down close to 1,600 points, while the Nifty slipped towards 24,800, losing more than 500 points. The fall marked one of the sharpest Budget Day reactions in recent years.
STT Hike Triggers Sell-Off
The market rout was triggered by a key tax proposal targeting derivatives. The Finance Minister announced an increase in the Securities Transaction Tax (STT) on futures and options. STT on futures was raised to 0.05 per cent from 0.02 per cent, while the levy on options was increased to 0.15 per cent from 0.1 per cent.
Though the hike appears modest, derivatives traders consider even small increases significant, especially in high-frequency and large-volume trades. Given the dominance of futures and options in daily market turnover, the segment is particularly sensitive to transaction-based levies.
Why STT Matters
STT is charged on securities transactions at the time of trade, regardless of profit or loss. Introduced in 2004 to replace long-term capital gains tax and simplify collections, it now coexists with LTCG, reintroduced in 2018.
Growing Tax Anxiety
Investor unease has been building after successive Budgets raised STT and capital gains taxes. LTCG currently stands at 12.5 per cent, while short-term capital gains are taxed at 20 per cent. Market participants fear the cumulative tax burden could dampen derivatives activity and trading volumes.
The sharp sell-off reflected concerns over higher transaction costs, tighter margins and reduced liquidity — anxieties that markets priced in swiftly on Budget Day.
