Union Budget for 2026-2027 was presented on Sunday the 1st of February 2026, the first time it was ever done on Sunday. It was a budget which was pragmatic, growth oriented and well thought out. The one single thing which spooked the market was the increase in STT on futures and options from 0.02% to 0.05%. There was no participation from FII’s today as this was a holiday. While the ministry believes that the increase in STT is to act as a deterrent, one saw all companies connected with the stock exchanges fall sharply, whether it be brokerages, trading platforms or stock exchanges.

The budget was based on pragmatism, a roadmap for the next five years. There certainly was nothing knee jerk in retaliation to tariffs or the US trade deal still not happening. One salient feature was on data centers which have been singled out with a tax clarity for the next 22 years. Looking at GCC’s and the growth in data centers, this makes it a stand out decision, well planned and forward looking. This will benefit BESS (battery as a storage system) and so on. Even solar generators will stand to gain.

Buybacks being taxed at capital gains instead of the earlier dividends will be another positive for the markets. The fiscal deficit being projected for the year is at 4.4% of GDP. Further, the government capital expenditure for the year ahead would be higher than the borrowings of the government during the year. This is something that would be happening for the first time.

Precious metals like Gold and Silver were under sharp selling pressure after what happened in the US markets on Friday. The sell-off continued in metals space with stocks like Vedanta, Hindustan Zinc, Hindustan Copper and Hindalco being big losers. The steel space too chipped in with big losses.

Coming to the indices today, NIFTY low was made at 24,571.75 points while the high was made at 25,440.90 points. It closed at 24,825.45 points, a loss of 495.20 points or 1.96%. BSESENSEX low was made at 79,899.42 points while the high was made at 82,726.65 points. It closed at 80,722.94 points, a loss of 1,546.84 points or 1.88%. This was a big fall and the same would be attributed to the budget while in reality it is not so.

Tomorrow, FPI’s would be back in action and one could expect some sort of a soft market on account of the metal sell-off along with precious metals. Expect markets to stabilize in a day or two. Today’s lows and about 250-300 points lower on NIFTY would act as strong supports. On the upside, today’s high at around 25,500 would act as strong resistance.

Historically, markets on budget day have been weak. They tend to recover post a couple of days and after the FM has done her typical press conferences and meeting various chambers of commerce. I strongly believe that 2026 budget would be no different.

The strategy post the budget would be to bide your time for a couple of days as markets look to recover and consolidate. Look to buy stocks which have been beaten down without rationale and wait for them to bounce back. Being patient will help.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)