< -5%

-5% to -3%

-3% to 0%

Medplus Health

0% to 3%

Shanti Guru Ind

3% to 5%

Aditya Consumer

Pharma, textile, EMS stocks surged post Budget 2026 sector-focused measures., BioPharma Shakti initiative announced with Rs 10,000 crore outlay for biopharma, Semiconductor Mission 2.0 and higher electronics spending boosted EMS stocks

* Pharma, textile, EMS stocks surged post Budget 2026 sector-focused measures.
* BioPharma Shakti initiative announced with Rs 10,000 crore outlay for biopharma
* Semiconductor Mission 2.0 and higher electronics spending boosted EMS stocks

Shares of pharma, textile, and electronics firms surged after the Union Budget 2026 announced sector-focused measures, including increased capital expenditure, support for biopharma, textile modernization, and electronics manufacturing, boosting related stocks.

shorts/business/pharma-textile-and-ems-stocks-lead-gains-after-budget-announcements

* Pharma, textile, EMS stocks surged post Budget 2026 sector-focused measures.
* BioPharma Shakti initiative announced with Rs 10,000 crore outlay for biopharma
* Semiconductor Mission 2.0 and higher electronics spending boosted EMS stocks

Shares of pharmaceutical, textile and electronic manufacturing services (EMS) companies emerged as top gainers after Finance Minister Nirmala Sitharaman announced a series of sector-focused measures in the Union Budget 2026.

The Budget was largely in line with market expectations, barring the hike in securities transaction tax on futures and options, which triggered a broader market sell-off. Outside the derivatives-related surprise, the government maintained its fiscal consolidation roadmap while continuing to support economic growth through higher capital expenditure and targeted policy support for emerging industries.

The government announced an 8 percent increase in capital expenditure to Rs 12.2 lakh crore for FY27, reinforcing visibility for infrastructure, capital goods and industrial companies. While the pace of spending growth moderated from earlier highs, the allocation is expected to sustain the investment cycle and provide continuity to order flows.

The Budget also marked a clear pivot toward new-age manufacturing and technology-driven sectors, with policy support announced for semiconductors, rare earth processing, biosimilars manufacturing, carbon capture technologies and electronics manufacturing. Several stocks linked to these segments witnessed strong gains following the announcements.

<strong>Pharma stocks rally</strong>

Pharmaceutical stocks rose sharply after the government announced a major push to position India as a global biopharma manufacturing hub.

The finance minister unveiled the BioPharma Shakti initiative, with an outlay of Rs 10,000 crore over the next five years, aimed at strengthening domestic manufacturing of biologics and biosimilars. The programme is intended to support capacity creation, reduce import dependence and enhance India’s competitiveness in high-value biopharmaceutical segments.

Following the announcement, the Nifty Pharma Index advanced, with shares of Sun Pharmaceutical Industries and Biocon gaining up to 3.8 percent and 2.9 percent, respectively.

<strong>Textile stocks gain on sector push</strong>

Textile stocks also witnessed strong buying interest after the government announced a multi-pronged strategy to expand and modernise the sector.

The Budget proposed the establishment of mega textile parks through a challenge-mode framework, with a special focus on technical textiles. The initiative aims to create large integrated manufacturing ecosystems and enhance competitiveness across the textile value chain.

Additional measures included a textile labour incentive scheme, a national handloom and handicrafts programme, a plan to strengthen textile skilling infrastructure, capital support for modern machinery, and the introduction of a proposed National Fibre Scheme.

Shares of Raymond and Trident surged more than 8 percent during intraday trade before paring some gains.

<strong>EMS stocks advance on electronics push</strong>

Electronic manufacturing services stocks also moved higher as the Budget strengthened India’s electronics and semiconductor ecosystem.

The government announced Semiconductor Mission 2.0, along with a near-doubling of the Electronics Components Manufacturing Scheme outlay to Rs 40,000 crore. Semiconductor spending was raised to Rs 8,000 crore for FY27 from Rs 4,300 crore, while the allocation for the Ministry of Electronics and Information Technology increased to Rs 21,633 crore.

Basic customs duty on mobile phones, printed circuit board assemblies and chargers was reduced from 20 percent to 15 percent, improving cost competitiveness and supporting domestic value addition. BCD exemptions for semiconductor and display manufacturing, solar equipment and consumer electronics have also been extended until FY28, providing longer-term capital expenditure visibility.

Shares of electronics manufacturers including Amber Enterprises India, Dixon Technologies India and Kaynes Technology gained following the announcements.

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Pharma, textile and EMS stocks lead gains after Budget announcements

Shares of pharmaceutical, textile and electronic manufacturing services (EMS) companies emerged as top gainers after Finance Minister Nirmala Sitharaman announced a series of sector-focused measures in the Union Budget 2026.

The Budget was largely in line with market expectations, barring the hike in securities transaction tax on futures and options, which triggered a broader market sell-off. Outside the derivatives-related surprise, the government maintained its fiscal consolidation roadmap while continuing to support economic growth through higher capital expenditure and targeted policy support for emerging industries.

The government announced an 8 percent increase in capital expenditure to Rs 12.2 lakh crore for FY27, reinforcing visibility for infrastructure, capital goods and industrial companies. While the pace of spending growth moderated from earlier highs, the allocation is expected to sustain the investment cycle and provide continuity to order flows.

The Budget also marked a clear pivot toward new-age manufacturing and technology-driven sectors, with policy support announced for semiconductors, rare earth processing, biosimilars manufacturing, carbon capture technologies and electronics manufacturing. Several stocks linked to these segments witnessed strong gains following the announcements.

Pharma stocks rally

Pharmaceutical stocks rose sharply after the government announced a major push to position India as a global biopharma manufacturing hub.

The finance minister unveiled the BioPharma Shakti initiative, with an outlay of Rs 10,000 crore over the next five years, aimed at strengthening domestic manufacturing of biologics and biosimilars. The programme is intended to support capacity creation, reduce import dependence and enhance India’s competitiveness in high-value biopharmaceutical segments.

Following the announcement, the Nifty Pharma Index advanced, with shares of Sun Pharmaceutical Industries and Biocon gaining up to 3.8 percent and 2.9 percent, respectively.

Textile stocks gain on sector push

Textile stocks also witnessed strong buying interest after the government announced a multi-pronged strategy to expand and modernise the sector.

The Budget proposed the establishment of mega textile parks through a challenge-mode framework, with a special focus on technical textiles. The initiative aims to create large integrated manufacturing ecosystems and enhance competitiveness across the textile value chain.

Additional measures included a textile labour incentive scheme, a national handloom and handicrafts programme, a plan to strengthen textile skilling infrastructure, capital support for modern machinery, and the introduction of a proposed National Fibre Scheme.

Shares of Raymond and Trident surged more than 8 percent during intraday trade before paring some gains.

EMS stocks advance on electronics push

Electronic manufacturing services stocks also moved higher as the Budget strengthened India’s electronics and semiconductor ecosystem.

The government announced Semiconductor Mission 2.0, along with a near-doubling of the Electronics Components Manufacturing Scheme outlay to Rs 40,000 crore. Semiconductor spending was raised to Rs 8,000 crore for FY27 from Rs 4,300 crore, while the allocation for the Ministry of Electronics and Information Technology increased to Rs 21,633 crore.

Basic customs duty on mobile phones, printed circuit board assemblies and chargers was reduced from 20 percent to 15 percent, improving cost competitiveness and supporting domestic value addition. BCD exemptions for semiconductor and display manufacturing, solar equipment and consumer electronics have also been extended until FY28, providing longer-term capital expenditure visibility.

Shares of electronics manufacturers including Amber Enterprises India, Dixon Technologies India and Kaynes Technology gained following the announcements.

PSU bank stocks fell as govt announced higher borrowing and bond supply targets, Capital market stocks fell due to STT hike on derivatives, increasing trading costs., BSE, Angel One, and MCX stocks fell due to reduced trading volumes.

* PSU bank stocks fell as govt announced higher borrowing and bond supply targets
* Capital market stocks fell due to STT hike on derivatives, increasing trading costs.
* BSE, Angel One, and MCX stocks fell due to reduced trading volumes.

PSU banks and capital market stocks fell sharply after the Union Budget 2026 announced higher government borrowing and increased securities transaction tax on derivatives, raising concerns over bond yields, trading costs, and reduced revenue for market intermediaries.

shorts/business/psu-banks-capital-market-stocks-swing-sharply-after-budget-measures

* PSU bank stocks fell as govt announced higher borrowing and bond supply targets
* Capital market stocks fell due to STT hike on derivatives, increasing trading costs.
* BSE, Angel One, and MCX stocks fell due to reduced trading volumes.

PSU banks and capital market stocks witnessed sharp volatility after the Union Budget 2026 outlined a higher government borrowing programme and announced an increase in securities transaction tax (STT) on derivatives.

Even as the government reaffirmed its fiscal consolidation path, the market reaction reflected concerns around bond supply pressure and higher trading costs.

On the fiscal front, the government pegged the fiscal deficit for FY26 at 4.4 percent of GDP and set a target of 4.3 percent for FY27. The debt-to-GDP ratio for FY27 was projected at 55.6 percent, with a roadmap to bring it closer to 50 percent, plus or minus one percentage point, by FY31.

<strong>PSU banks under pressure</strong>

PSU bank stocks declined sharply after the government announced a higher borrowing target. Market participants had expected measures such as consolidation of state-run banks and relaxation in foreign shareholding limits, which were absent from the Budget.

India’s plan to issue a record volume of government bonds in the year starting April 1 also weighed on sentiment, as higher supply could pressure yields and impact treasury income of state-owned lenders.

Shares of major banks, including State Bank of India, fell, with the NSE Nifty PSU Bank Index dropping as much as 5.6 percent.

Nandish Shah, Deputy Vice President at HDFC Securities, said PSU banks were rattled by elevated government borrowing targets, which raised concerns over rising yields and potential mark-to-market losses on bond portfolios.

<strong>Capital market stocks hit by STT hike</strong>

Capital market stocks also came under heavy selling after the government announced a hike in securities transaction tax on futures and options.

The increase in STT raised trading costs at a time when market sentiment was already fragile and derivatives activity had weakened. Industry estimates suggest derivatives volumes are nearly 30 percent lower from their 2024 peak levels.

Dhruv Chopra, Managing Partner at Dewan PN Chopra &amp; Co, said the immediate consequence of the tax hike is higher transaction costs, which act as a disincentive for derivatives trading, particularly among retail investors.

He added that the move is aimed at curbing excessive speculation and protecting retail participants from market volatility that has driven sharp swings in equity and commodity prices in recent months.

The impact was reflected across capital market stocks that depend heavily on trading volumes. Shares of BSE fell nearly 13–13.5 percent, while Groww and Angel One declined around 13.5 percent each. MCX dropped more than 17 percent, hitting a lower circuit, while Nuvama Wealth Management fell about 9 percent.

Chopra noted that nearly 60 percent of BSE’s revenue comes from equity derivatives, while around 75 percent of Angel One’s broking revenue is linked to futures and options. Nuvama also has meaningful exposure, with roughly 25 percent of its revenue derived from derivatives activity. According to him, the sharp correction in these stocks reflects investor concerns over the potential impact of lower trading volumes on revenue visibility and profitability of capital-market intermediaries.

PSU banks, capital market stocks swing sharply after Budget measures

PSU banks and capital market stocks witnessed sharp volatility after the Union Budget 2026 outlined a higher government borrowing programme and announced an increase in securities transaction tax (STT) on derivatives.

Even as the government reaffirmed its fiscal consolidation path, the market reaction reflected concerns around bond supply pressure and higher trading costs.

On the fiscal front, the government pegged the fiscal deficit for FY26 at 4.4 percent of GDP and set a target of 4.3 percent for FY27. The debt-to-GDP ratio for FY27 was projected at 55.6 percent, with a roadmap to bring it closer to 50 percent, plus or minus one percentage point, by FY31.

PSU banks under pressure

PSU bank stocks declined sharply after the government announced a higher borrowing target. Market participants had expected measures such as consolidation of state-run banks and relaxation in foreign shareholding limits, which were absent from the Budget.

India’s plan to issue a record volume of government bonds in the year starting April 1 also weighed on sentiment, as higher supply could pressure yields and impact treasury income of state-owned lenders.

Shares of major banks, including State Bank of India, fell, with the NSE Nifty PSU Bank Index dropping as much as 5.6 percent.

Nandish Shah, Deputy Vice President at HDFC Securities, said PSU banks were rattled by elevated government borrowing targets, which raised concerns over rising yields and potential mark-to-market losses on bond portfolios.

Capital market stocks hit by STT hike

Capital market stocks also came under heavy selling after the government announced a hike in securities transaction tax on futures and options.

The increase in STT raised trading costs at a time when market sentiment was already fragile and derivatives activity had weakened. Industry estimates suggest derivatives volumes are nearly 30 percent lower from their 2024 peak levels.

Dhruv Chopra, Managing Partner at Dewan PN Chopra &amp;amp; Co, said the immediate consequence of the tax hike is higher transaction costs, which act as a disincentive for derivatives trading, particularly among retail investors.

He added that the move is aimed at curbing excessive speculation and protecting retail participants from market volatility that has driven sharp swings in equity and commodity prices in recent months.

The impact was reflected across capital market stocks that depend heavily on trading volumes. Shares of BSE fell nearly 13–13.5 percent, while Groww and Angel One declined around 13.5 percent each. MCX dropped more than 17 percent, hitting a lower circuit, while Nuvama Wealth Management fell about 9 percent.

Chopra noted that nearly 60 percent of BSE’s revenue comes from equity derivatives, while around 75 percent of Angel One’s broking revenue is linked to futures and options. Nuvama also has meaningful exposure, with roughly 25 percent of its revenue derived from derivatives activity. According to him, the sharp correction in these stocks reflects investor concerns over the potential impact of lower trading volumes on revenue visibility and profitability of capital-market intermediaries.

Nifty Realty index dropped 2% as Budget missed affordable housing support., CREDAI expressed disappointment over no concrete measures for affordable housing., Budget's infrastructure focus may boost realty sector long-term despite short-term pain.

* Nifty Realty index dropped 2% as Budget missed affordable housing support.
* CREDAI expressed disappointment over no concrete measures for affordable housing.
* Budget's infrastructure focus may boost realty sector long-term despite short-term pain.

Realty stocks fell over 2% on Budget day as no major support for affordable housing was announced. CREDAI voiced disappointment, warning of a shrinking affordable segment. Some industry players see long-term benefits from increased infrastructure spending.

shorts/business/realty-shares-see-profit-booking-on-budget-day-lodha-godrej-properties-decline-up-to-5-here-s-why

* Nifty Realty index dropped 2% as Budget missed affordable housing support.
* CREDAI expressed disappointment over no concrete measures for affordable housing.
* Budget's infrastructure focus may boost realty sector long-term despite short-term pain.

Realty shares witnessed profit booking on Budget day, with the sector reacting negatively to the absence of any major policy support for affordable housing.

The Nifty Realty index declined over 2 percent on Friday, erasing all the gains made over the previous four sessions, during which it had risen 2.15 percent.

Industry body CREDAI expressed disappointment over the Budget announcements, citing the lack of concrete measures for affordable housing.

"CREDAI is deeply disappointed that the Budget offers nothing concrete for affordable housing. With the current outdated definition of affordable housing, CREDAI estimates that the segment’s share could decline further from 18 percent to nearly 12 percent of total housing supply. This is a serious warning sign for India’s lower middle class and middle class," CREDAI National President Shekhar Patel said.

Eight of the ten constituents of the Nifty Realty index ended lower amid sharp selling pressure. <a href="https://www.moneycontrol.com/india/stockpricequote/construction-residentialcommercial-complexes/lodhadevelopers/MD03">Lodha Developers</a> and <a href="https://www.moneycontrol.com/india/stockpricequote/constructioncontracting-real-estate/sobha/SD6">Sobha</a> emerged as major laggards, falling up to 5 percent.

Godrej Properties, DLF, Oberoi Realty and Signatureglobal (India) were among other stocks that declined up to 5 percent.

Meanwhile, some industry players said the Budget’s focus on infrastructure and regional development could support the sector over the longer term.

Gurpal Singh Chawla, Managing Director of TREVOC Group, said the emphasis on funding for Tier-2 and Tier-3 cities was a positive step. He noted that the City Economic Regions framework and continued push for capital expenditure would gradually strengthen real estate fundamentals beyond metro markets, though immediate demand impact may be limited.

The Union Budget 2026 raised public capital expenditure to Rs 12.2 lakh crore and announced the introduction of the Infrastructure Risk Guarantee Fund, reinforcing the government’s focus on infrastructure-led growth.

Industry players said these measures could improve execution visibility and liquidity across real estate segments. Manoj Gaur, Chairman and Managing Director of Gaurs Group, said the Budget’s emphasis on infrastructure and financial stability would help sustain momentum seen in the sector in recent years.

Amit Modi, Director of County Group, said the Infrastructure Risk Guarantee Fund would improve funding confidence and reduce execution risks for long-gestation projects.

ANAROCK Group Chairman Anuj Puri, however, said the Budget provided limited direct relief to the real estate sector, with benefits largely coming through higher capital expenditure and related initiatives in manufacturing, MSMEs, tourism, transport infrastructure and green transition.

<em><strong>Disclaimer:</strong> The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.</em>

Realty shares see profit booking on Budget day; Lodha, Godrej Properties decline up to 5% - Here's why

Realty shares witnessed profit booking on Budget day, with the sector reacting negatively to the absence of any major policy support for affordable housing.

The Nifty Realty index declined over 2 percent on Friday, erasing all the gains made over the previous four sessions, during which it had risen 2.15 percent.

Industry body CREDAI expressed disappointment over the Budget announcements, citing the lack of concrete measures for affordable housing.

&quot;CREDAI is deeply disappointed that the Budget offers nothing concrete for affordable housing. With the current outdated definition of affordable housing, CREDAI estimates that the segment’s share could decline further from 18 percent to nearly 12 percent of total housing supply. This is a serious warning sign for India’s lower middle class and middle class,&quot; CREDAI National President Shekhar Patel said.

Eight of the ten constituents of the Nifty Realty index ended lower amid sharp selling pressure. Lodha Developers and Sobha emerged as major laggards, falling up to 5 percent.

Godrej Properties, DLF, Oberoi Realty and Signatureglobal (India) were among other stocks that declined up to 5 percent.

Meanwhile, some industry players said the Budget’s focus on infrastructure and regional development could support the sector over the longer term.

Gurpal Singh Chawla, Managing Director of TREVOC Group, said the emphasis on funding for Tier-2 and Tier-3 cities was a positive step. He noted that the City Economic Regions framework and continued push for capital expenditure would gradually strengthen real estate fundamentals beyond metro markets, though immediate demand impact may be limited.

The Union Budget 2026 raised public capital expenditure to Rs 12.2 lakh crore and announced the introduction of the Infrastructure Risk Guarantee Fund, reinforcing the government’s focus on infrastructure-led growth.

Industry players said these measures could improve execution visibility and liquidity across real estate segments. Manoj Gaur, Chairman and Managing Director of Gaurs Group, said the Budget’s emphasis on infrastructure and financial stability would help sustain momentum seen in the sector in recent years.

Amit Modi, Director of County Group, said the Infrastructure Risk Guarantee Fund would improve funding confidence and reduce execution risks for long-gestation projects.

ANAROCK Group Chairman Anuj Puri, however, said the Budget provided limited direct relief to the real estate sector, with benefits largely coming through higher capital expenditure and related initiatives in manufacturing, MSMEs, tourism, transport infrastructure and green transition.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Government hikes STT on derivatives, raising costs for traders and investors, Capital market stocks fell; BSE dropped nearly 10% after announcement., Diversified revenue streams help brokerage firms absorb the STT impact better.

* Government hikes STT on derivatives, raising costs for traders and investors
* Capital market stocks fell; BSE dropped nearly 10% after announcement.
* Diversified revenue streams help brokerage firms absorb the STT impact better.

Capital market stocks fell sharply after the government raised securities transaction tax on derivatives in the Union Budget, increasing costs for traders. Broking firms and exchanges saw declines, with experts warning of lower volumes and earnings pressure ahead.

shorts/business/budget-2026-capital-market-stocks-tumble-after-fm-raises-stt-on-derivatives

* Government hikes STT on derivatives, raising costs for traders and investors
* Capital market stocks fell; BSE dropped nearly 10% after announcement.
* Diversified revenue streams help brokerage firms absorb the STT impact better.

Capital market stocks witnessed a sharp sell-off after the government announced an increase in the securities transaction tax (STT) on derivatives in the Union Budget.

Under the proposal, STT on futures has been raised to 0.05 percent from the current 0.02 percent. STT on options premium and exercise of options has been increased to 0.15 percent from the existing 0.1 percent and 0.125 percent, respectively. The higher levy significantly increases trading costs in the futures and options segment for traders and investors.

Following the announcement, shares of BSE fell sharply by nearly 10 percent amid concerns of a potential slowdown in trading volumes. Brokerage stocks such as Angel One, 5paisa and other listed broking firms also came under heavy pressure.

Market-linked institutions including CDSL declined as well, as lower trading activity could impact demat account additions and transaction volumes. Overall, capital market stocks emerged among the worst performers on Budget Day.

<strong>Outlook</strong>

The increase in STT directly affects broking companies by raising transaction costs in the high-volume derivatives segment, which contributes significantly to their revenues through brokerage commissions.

Shashank Udupa, SEBI-registered research analyst and fund manager at Smallcase, said the move represents a major setback for the rapidly expanding capital market ecosystem.

“This will not only curb retail participation in the futures and options segment but will also lead to lower trading volumes. The impact will be felt across profitability metrics for capital market players,” he said, adding that prolonged pressure on volumes could result in cost rationalisation measures across exchanges and broking firms.

Market participants said the hike creates a structurally challenging environment in the near term for pure-play broking companies and exchanges, particularly those heavily dependent on options volumes and high-frequency retail participation. Margin pressure and slower client activity could weigh on quarterly earnings.

However, over the medium to long term, analysts believe companies with diversified revenue streams may be better positioned to absorb the impact. Businesses with exposure to wealth management, advisory services, mutual fund distribution, asset management and institutional broking are likely to face lower earnings volatility.

Aakash Shah of Choice Broking said firms with a higher contribution from advisory, portfolio management services, mutual fund distribution and investment banking could be relatively insulated from fluctuations in derivatives volumes.

While valuations across capital market stocks have corrected sharply following the announcement, visibility on volume recovery remains limited. Until clarity emerges on the regulatory stance and stability returns to derivatives activity, analysts expect capital market stocks to remain range-bound to weak, with selective opportunities confined to well-diversified franchises rather than businesses heavily dependent on futures and options trading

Budget 2026: Capital market stocks tumble after FM raises STT on derivatives

Capital market stocks witnessed a sharp sell-off after the government announced an increase in the securities transaction tax (STT) on derivatives in the Union Budget.

Under the proposal, STT on futures has been raised to 0.05 percent from the current 0.02 percent. STT on options premium and exercise of options has been increased to 0.15 percent from the existing 0.1 percent and 0.125 percent, respectively. The higher levy significantly increases trading costs in the futures and options segment for traders and investors.

Following the announcement, shares of BSE fell sharply by nearly 10 percent amid concerns of a potential slowdown in trading volumes. Brokerage stocks such as Angel One, 5paisa and other listed broking firms also came under heavy pressure.

Market-linked institutions including CDSL declined as well, as lower trading activity could impact demat account additions and transaction volumes. Overall, capital market stocks emerged among the worst performers on Budget Day.

Outlook

The increase in STT directly affects broking companies by raising transaction costs in the high-volume derivatives segment, which contributes significantly to their revenues through brokerage commissions.

Shashank Udupa, SEBI-registered research analyst and fund manager at Smallcase, said the move represents a major setback for the rapidly expanding capital market ecosystem.

“This will not only curb retail participation in the futures and options segment but will also lead to lower trading volumes. The impact will be felt across profitability metrics for capital market players,” he said, adding that prolonged pressure on volumes could result in cost rationalisation measures across exchanges and broking firms.

Market participants said the hike creates a structurally challenging environment in the near term for pure-play broking companies and exchanges, particularly those heavily dependent on options volumes and high-frequency retail participation. Margin pressure and slower client activity could weigh on quarterly earnings.

However, over the medium to long term, analysts believe companies with diversified revenue streams may be better positioned to absorb the impact. Businesses with exposure to wealth management, advisory services, mutual fund distribution, asset management and institutional broking are likely to face lower earnings volatility.

Aakash Shah of Choice Broking said firms with a higher contribution from advisory, portfolio management services, mutual fund distribution and investment banking could be relatively insulated from fluctuations in derivatives volumes.

While valuations across capital market stocks have corrected sharply following the announcement, visibility on volume recovery remains limited. Until clarity emerges on the regulatory stance and stability returns to derivatives activity, analysts expect capital market stocks to remain range-bound to weak, with selective opportunities confined to well-diversified franchises rather than businesses heavily dependent on futures and options trading

Sensex fell 1,547 points and Nifty 50 dropped 495 points after Budget 2026, STT on futures and options raised, hurting capital market stocks, Tourism, IT, jewellery, and textile stocks rose on sector-specific Budget measures.

* Sensex fell 1,547 points and Nifty 50 dropped 495 points after Budget 2026
* STT on futures and options raised, hurting capital market stocks
* Tourism, IT, jewellery, and textile stocks rose on sector-specific Budget measures.

Indian stock markets fell sharply after the Union Budget 2026, with Sensex down 1,547 points and Nifty 50 by 495. Gains in IT, tourism, jewellery, and textile stocks were offset by higher STT on futures, weak banking, defence, and lack of foreign investor incentives.

shorts/business/what-s-good-and-bad-in-budget-2026-for-stock-markets-here-s-what-analysts-say

* Sensex fell 1,547 points and Nifty 50 dropped 495 points after Budget 2026
* STT on futures and options raised, hurting capital market stocks
* Tourism, IT, jewellery, and textile stocks rose on sector-specific Budget measures.

Indian stock markets saw significant decline on February 1 after Finance Minister Nirmala Sitharaman presented Union Budget 2026 in the Lok Sabha. Analysts have pointed out what bothered the markets, while what triggered pockets of buying during the trading session.

Sensex fell nearly 1,547 points (around 1.9 percent) to end the session at 80,722.94. Nifty 50 meanwhile plunged over 495 points (nearly 2 percent) to close at 24,825.45.
<h3><strong>What’s good in the Budget for the markets?</strong></h3>
Despite the sharp selloff, markets did see some recovery in between. This was driven by several positive announcements in the Budget.
<h5><strong>Buyback to be taxed as capital gains:</strong></h5>
Finance Minister Nirmala Sitharaman on February 1 proposed to <a href="https://www.moneycontrol.com/news/business/markets/budget-2026-fm-sitharaman-says-buyback-for-all-shareholders-to-be-taxed-as-capital-gains-13802960.html">tax buyback for all shareholders as capital gains</a>. She however added that promoters will pay an additional buyback tax.

Amit Gupta, Partner at Saraf and Partners, said buyback taxation was again tweaked back to being characterized as capital gain. "The buyback taxation regime was revamped in past budgets wherein entire amount received through buy-back was to be taxed as dividend for preventing promoter profit extraction and abuse. This recalcitration as capital gains is a welcome change and would pacify the concerns of taxpayers around buy-back route taxation," the expert said.

As a result, the shares of <a href="https://www.moneycontrol.com/news/business/markets/it-index-rises-up-to-4-from-day-s-low-after-buyback-tax-revision-in-budget-2026-wipro-tcs-rise-up-to-3-13803347.html">IT companies</a>, who are known to have declared most of the major buybacks, gained in trade. <a href="https://www.moneycontrol.com/india/stockpricequote/computers-software/wipro/W">Wipro</a> and Tata Consultancy Services (<a href="https://www.moneycontrol.com/india/stockpricequote/computers-software/tataconsultancyservices/TCS">TCS</a>) shares rose around 2 percent each. LTIMindtree, Persistent Systems and Infosys shares also ended the session in the green.
<h5><strong>Tourism stocks:</strong></h5>
<a href="https://www.moneycontrol.com/india/stockpricequote/travel-services/easytripplanners/ETP01">Easy Trip</a>, and other tourism stocks jumped after the Finance Minister announced several measures to boost the sector. She proposed to develop 15 archaeological sites, including Sarnath and Hastinapur, into vibrant cultural destinations as part of a broader push to boost heritage tourism.

She also proposed to <a href="https://www.moneycontrol.com/news/business/markets/budget-2026-thomas-cook-easy-trip-shares-rise-up-to-11-as-fm-reduces-tcs-rate-on-overseas-tour-packages-to-2-13802867.html">reduce TCS rate</a> on the sale of overseas tour programme package. While presenting the Union Budget 2026, Sitharaman said the Budget aims to reduce TCS rate on these packages from the current 5 percent and 20 percent to 2 percent without any stipulation of amount.
<h5><strong>Jewellery stocks:</strong></h5>
The <a href="https://www.moneycontrol.com/news/business/markets/kalyan-jewellers-titan-other-jewellery-stocks-jump-up-to-6-as-fm-keeps-customs-duty-on-gold-silver-unchanged-13803517.html">shares of several jewelers</a> surged after Finance Minister Nirmala Sitharaman kept rates on customs duty unchanged for import of gold and silver. EMS stocks also rose after she announced a <a href="https://www.moneycontrol.com/news/business/earnings/ems-stocks-rally-after-rs40000-crore-budget-boost-13802674.html">Rs 40,000-crore outlay</a> for the sector.

Along with these measures, Finance Minister proposed to build <a href="https://www.moneycontrol.com/news/business/markets/budget-2026-max-healthcare-other-hospital-stocks-rise-up-to-4-as-fm-proposes-to-build-5-medical-tourism-hubs-13802772.html">5 medical tourism hubs in India</a>, pushing hospital stocks higher up. Meanwhile, textile stocks rose after she announced several measures to expand and modernise India’s textile sector, with plans to set up mega textile parks through a challenge mode framework.

Fisheries and semiconductor stocks also gained in trade.
<h3><strong>What’s bad in the Budget for the markets?</strong></h3>
While presenting Budget 2026, Finance Minister Nirmala Sitharaman raised <a href="https://www.moneycontrol.com/news/business/budget-2026-stt-on-futures-increased-to-0-05-and-options-to-0-15-buyback-tax-for-retail-investors-reduced-13802901.html">STT on futures</a> to 0.05 percent from 0.02 percent. This was seen as a significant reason for the market crash today, as investors on the contrary had expected significant relief on this front.
<h5><strong>STT on F&amp;O increased:</strong></h5>
For every Rs 1 lakh worth of futures sold, traders will now pay Rs 20 in STT instead of the previous Rs 12.50, explained Ashish Singhal, Co-founder of Lemonn. For a Rs 10,000 option contract sale, STT increased to Rs 10 from Rs 6.25, he added.

“As the current STT framework does not differentiate between various categories of users or the purpose of derivative usage, genuine hedging activity is subject to the same higher costs as speculative trading. This uniform treatment could discourage some investors from employing prudent hedging strategies, effectively increasing their exposure to market risk and making portfolio protection more expensive,” the analyst said.

"The steep increase in STT on futures and options, coming on top of last year’s hike, is likely to raise impact costs for traders, hedgers, and arbitrageurs. This could cool derivative activity and lead to a reduction in volumes. The intent appears to be volume moderation rather than revenue maximisation, as any potential revenue gain could be offset by lower derivative volumes," said Shripal Shah, MD &amp; CEO, Kotak Securities.

As a result of the STT hike, capital markets stocks plunged. MCX shares dropped 12 percent, while Angel One and BSE shares fell more than 8 percent each.
<h5><strong>Banking stocks:</strong></h5>
PSU Bank stocks declined sharply, pushing the Nifty Bank index down amid concerns over potential mergers and elevated government borrowing. “Govt has set up a high-level committee to review the banking sector, and this committee could potentially be mandated to look for mergers among public sector banks. Historically, bank mergers tend to create near-term drag on performance," said Anand Dama, head, BFSI Research, Emkay Global.
<h5><strong>No major incentive to woo foreign investors:</strong></h5>
The absence of significant incentives for foreign investors, who have withdrawn $23 billion from local equities since the start of 2025, also hurt sentiment. "At a time when India needs to deepen market liquidity and attract global flows, raising frictional trading costs sends the opposite signal," said Jimeet Modi, founder and chief executive at SAMCO Group.
<h5><strong>Defence stocks:</strong></h5>
The shares of <a href="https://www.moneycontrol.com/news/business/markets/bdl-grse-other-defence-stocks-fall-up-to-14-as-budget-2026-misses-expectations-on-capex-outlay-index-falls-9-13803145.html">defence companies also tumbled in trade</a> as Finance Minister Nirmala Sitharaman’s capex plans for the sector failed to meet analysts and industry’s expectations. While presenting Budget 2026, Finance Minister Nirmala Sitharaman pegged FY27 defence expenditure at Rs 5.94 lakh crore, up from Rs 5.68 lakh crore in FY26.

Defence capital expenditure has increased 21 percent year-on-year, with the allocation for defence modernisation seeing a sharper 24 percent rise over last year.

Follow all <a href="https://www.moneycontrol.com/news/business/union-budget-2026-live-news-updates-finance-minister-nirmala-sitharaman-budget-speech-key-announcements-liveblog-13802050.html?utm_source=budget_2026&amp;utm_medium=desktop_Home_Page&amp;utm_campaign=Budget_Article_Consumption_Top_Stories_Live_Coverage">LIVE updates</a> on Budget here.

<em>Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.</em>

What's good and bad in Budget 2026 for stock markets? Here's what analysts say

Indian stock markets saw significant decline on February 1 after Finance Minister Nirmala Sitharaman presented Union Budget 2026 in the Lok Sabha. Analysts have pointed out what bothered the markets, while what triggered pockets of buying during the trading session.

Sensex fell nearly 1,547 points (around 1.9 percent) to end the session at 80,722.94. Nifty 50 meanwhile plunged over 495 points (nearly 2 percent) to close at 24,825.45.
What’s good in the Budget for the markets?
Despite the sharp selloff, markets did see some recovery in between. This was driven by several positive announcements in the Budget.
Buyback to be taxed as capital gains:
Finance Minister Nirmala Sitharaman on February 1 proposed to tax buyback for all shareholders as capital gains. She however added that promoters will pay an additional buyback tax.

Amit Gupta, Partner at Saraf and Partners, said buyback taxation was again tweaked back to being characterized as capital gain. &quot;The buyback taxation regime was revamped in past budgets wherein entire amount received through buy-back was to be taxed as dividend for preventing promoter profit extraction and abuse. This recalcitration as capital gains is a welcome change and would pacify the concerns of taxpayers around buy-back route taxation,&quot; the expert said.

As a result, the shares of IT companies, who are known to have declared most of the major buybacks, gained in trade. Wipro and Tata Consultancy Services (TCS) shares rose around 2 percent each. LTIMindtree, Persistent Systems and Infosys shares also ended the session in the green.
Tourism stocks:
Easy Trip, and other tourism stocks jumped after the Finance Minister announced several measures to boost the sector. She proposed to develop 15 archaeological sites, including Sarnath and Hastinapur, into vibrant cultural destinations as part of a broader push to boost heritage tourism.

She also proposed to reduce TCS rate on the sale of overseas tour programme package. While presenting the Union Budget 2026, Sitharaman said the Budget aims to reduce TCS rate on these packages from the current 5 percent and 20 percent to 2 percent without any stipulation of amount.
Jewellery stocks:
The shares of several jewelers surged after Finance Minister Nirmala Sitharaman kept rates on customs duty unchanged for import of gold and silver. EMS stocks also rose after she announced a Rs 40,000-crore outlay for the sector.

Along with these measures, Finance Minister proposed to build 5 medical tourism hubs in India, pushing hospital stocks higher up. Meanwhile, textile stocks rose after she announced several measures to expand and modernise India’s textile sector, with plans to set up mega textile parks through a challenge mode framework.

Fisheries and semiconductor stocks also gained in trade.
What’s bad in the Budget for the markets?
While presenting Budget 2026, Finance Minister Nirmala Sitharaman raised STT on futures to 0.05 percent from 0.02 percent. This was seen as a significant reason for the market crash today, as investors on the contrary had expected significant relief on this front.
STT on F&amp;amp;O increased:
For every Rs 1 lakh worth of futures sold, traders will now pay Rs 20 in STT instead of the previous Rs 12.50, explained Ashish Singhal, Co-founder of Lemonn. For a Rs 10,000 option contract sale, STT increased to Rs 10 from Rs 6.25, he added.

“As the current STT framework does not differentiate between various categories of users or the purpose of derivative usage, genuine hedging activity is subject to the same higher costs as speculative trading. This uniform treatment could discourage some investors from employing prudent hedging strategies, effectively increasing their exposure to market risk and making portfolio protection more expensive,” the analyst said.

&quot;The steep increase in STT on futures and options, coming on top of last year’s hike, is likely to raise impact costs for traders, hedgers, and arbitrageurs. This could cool derivative activity and lead to a reduction in volumes. The intent appears to be volume moderation rather than revenue maximisation, as any potential revenue gain could be offset by lower derivative volumes,&quot; said Shripal Shah, MD &amp;amp; CEO, Kotak Securities.

As a result of the STT hike, capital markets stocks plunged. MCX shares dropped 12 percent, while Angel One and BSE shares fell more than 8 percent each.
Banking stocks:
PSU Bank stocks declined sharply, pushing the Nifty Bank index down amid concerns over potential mergers and elevated government borrowing. “Govt has set up a high-level committee to review the banking sector, and this committee could potentially be mandated to look for mergers among public sector banks. Historically, bank mergers tend to create near-term drag on performance,&quot; said Anand Dama, head, BFSI Research, Emkay Global.
No major incentive to woo foreign investors:
The absence of significant incentives for foreign investors, who have withdrawn $23 billion from local equities since the start of 2025, also hurt sentiment. &quot;At a time when India needs to deepen market liquidity and attract global flows, raising frictional trading costs sends the opposite signal,&quot; said Jimeet Modi, founder and chief executive at SAMCO Group.
Defence stocks:
The shares of defence companies also tumbled in trade as Finance Minister Nirmala Sitharaman’s capex plans for the sector failed to meet analysts and industry’s expectations. While presenting Budget 2026, Finance Minister Nirmala Sitharaman pegged FY27 defence expenditure at Rs 5.94 lakh crore, up from Rs 5.68 lakh crore in FY26.

Defence capital expenditure has increased 21 percent year-on-year, with the allocation for defence modernisation seeing a sharper 24 percent rise over last year.

Follow all LIVE updates on Budget here.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

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