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.

The week gone by was yet another tough and down week. After remaining sideways over the previous week, BSESENSEX lost 2,032.65 points or 2.43% to close at 81,537.70 points while NIFTY lost 645.70 points or 2.51% to close at 25,048.65 points. BANKNIFTY lost 1,622.05 points or 2.70% to close at 58,473.10 points. The broader markets saw BSE100, BSE200 and BSE500 lose 2.74%, 3.01% and 3.31%. BSEMIDCAP lost 4.20% while BSESMALLCAP was down 5.79%. The best performing sector of last year, BSEMETAL was also down 1.01% this week. Incidentally all sectorial indices were negative this week. Markets gained on just one of the five trading sessions and was down on four. In three weeks’ duration, the cumulative damage to the benchmark indices has been about 5% which is substantial by all counts. 

The Indian Rupee was under pressure and lost Rs 1.11 or 1.22% to close at Rs 91.88 to the US Dollar. Dow Jones lost 260.60 points or 0.53% to close at 49,098.71 points. Dow gained on two of the four sessions and lost on two. 

There were two listings last week. The first was of Bharat Coking Coal Limited or BCCL which listed on Monday the 19th of January. Against an issue price of Rs 23, the share debuted at Rs 45.21 which was also the high and closed day one at Rs 40.66. By Friday, the share had shed some of its gains and closed at Rs 36.59, a gain of Rs 13.59 or 59.09%. 

The second share to list was Amagi Media Labs Limited which listed on Wednesday the 21st of January. Against the issue price of Rs 361, the discovered price was Rs 317.65 and the closing price Rs 348. This was the first share to close in the negative on the main board during calendar year 2026. The share recovered thereafter and closed at Rs 375.70, a gain of Rs 14.70 or 4.07%. 

There are no other main board issues slated to open in the coming week and it appears markets are now awaiting the presentation of the Union Budget on Sunday the 1st of February. 

The week ahead begins with a trading holiday on account of India’s 77th Republic day celebrations on Monday the 26th of January. Markets would trade on Tuesday with NIFTY futures for January expiring on that day. The mood is negative and with the kind of continuous selling by FPI’s over the last few months and the geo-political scenario, not much of optimism could be expected from the expiry. Further, the damage to share prices is across the board and not restricted to any one segment. 

NIFTY FUTURES are down 890.70 points or 3.43% at 25,048.65 points. The series had begun at 25,938.85 points. The best one could expect is the bulls to pull something back from the lost series. 

It is widely believed that India and the European Union would sign a trade deal which would be mutually beneficial to both. In terms of timing it could happen as early as Tuesday. However, considering that the long awaited India-US trade deal is yet to happen, one can at best be optimistic but not bank on it. On the positive side, if such a trade deal were to happen, expect the US to be forced into signing a trade deal with India, as their bullying tactics would have failed. In short, plenty of reason to be hopeful, but need to be patient. 

Lows made during the week were around 24,900 points, a level last seen during the beginning of October. While a lot of price damage has happened, the unfortunate part is that valuations have not improved significantly simply because early results from Q3 results have not been up to the mark. Everything and everyone is waiting for something to happen. 

Coming to Donald Trump and his famous tariffs, he has literally decided to dictate which country will do trade with whom. If it is not to his liking, then tariffs against that country for supply to US would be imposed at levels of 50 and 100%. One major point is that it is up to the exporting country to decide whether they want to export or not. Secondly, tariff is for importing into US, therefore the same is paid by the American, not the seller or shipper. Don’t know when this would become clear to all that matter. 

Coming to the short four day week which would end with Budget happening on Sunday, It would be choppy and volatile. A lot is likely to happen and will happen on various fronts. For sure things will not remain the same next Monday, but what would have transpired and what will be the impact, one will have to wait for the two important events. Trading levels for the week ahead would be support at 24,700 points on NIFTY and further down around 24,200-300 points. On the upside, one must look at initiating long trades only after the markets sustain 25,300 points. 

Bide your time, keep your fingers crossed and hope that the EU trade deal and budget brings cheer to the capital markets.