Budget 2026, stock market selloff: Investors lose Rs 10 lakh crore as Sensex, Nifty crash

Union Budget 2026: Domestic equity benchmarks Sensex and Nifty saw a sharp decline on the historic Sunday session following the Union Budget 2026 announcement and Finance Minister Nirmala Sitharaman's proposal to hike the Securities Transaction Tax (STT) on derivatives.

At close, the Sensex plunged 1546.84 points, or 1.88 per cent, to close at 80,722.94, while the Nifty declined 495.20 points, or 1.96 per cent, to close at 24,825.45.

Domestic equity benchmarks witnessed a sharp sell-off, wiping out Rs 10 lakh crore in market value. Investor wealth, measured by the BSE’s total market capitalisation, slipped to Rs 449.87 lakh crore from Rs 459.88 lakh crore in the previous session. The initial positive mood in the market did not last long as higher transaction costs and the absence of strong triggers for foreign inflows dampened sentiment, said Ponmudi R, CEO of Enrich Money.

Ponmudi said that optimism faded quickly due to higher transaction costs driven by the increase in Securities Transaction Tax (STT) on equity derivatives, as well as a lack of strong measures to revive foreign capital inflows, which weighed on near-term liquidity expectations. Bharat Electronics (BEL) emerged as the top loser on the Sensex, falling 6.01% to Rs 422. State Bank of India (SBI) followed with a 5.43% decline, while Adani Ports, ITC, NTPC and Reliance Industries fell 4.98%, 4.31%, 4.13% and 3.85%, respectively.  V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said that the Budget is slightly disappointing from a stock market perspective because many market participants expected capital gains tax relief, which did not occur.

Five stocks, namely Reliance Industries, State Bank of India, HDFC Bank, ICICI Bank and Larsen & Toubro (L&T), contributed heavily to the Sensex’s fall.  Among sectoral indices, the BSE PSU Bank index plunged 5.60% to close at 4,807.19, while the BSE Metal slipped 3.85% to settle at 37,349.33.

Market breadth remained negative on the BSE. Of the 4,309 actively traded stocks, 1,758 ended in the green, while a dominant 2,379 declined and 172 settled unchanged. The session saw 68 stocks scaling fresh 52-week highs, compared with 253 counters sliding to new 52-week lows. In addition, 187 scrips were locked at their upper circuits, whereas 160 hit lower circuit limits. The 50-pack index struggled to hold early gains, noting that it attempted to sustain above the 25,400 mark in early trade but reversed sharply after 11 am as Budget proposals emerged during the Finance Minister’s speech, Ponmudi said.

“The index decisively broke below the 25,000–24,900 support band and slid swiftly to an intraday low near 24,572. The subsequent rebound towards the 25,150 zone lacked conviction, highlighting weak follow-through buying amid elevated volatility. Fresh selling emerged once again, dragging the index back below the 25,000 psychological level into the 24,700–24,800 zone,” Ponmudi added.

“But from the medium to long-term perspective, this is a good Budget which lays out a clear strategy for growth with fiscal prudence. Nominal GDP can rise by 10% in FY 27 enabling corporate earnings to rise by around 15 %, which is good from the market perspective," Vijayakumar added.