Mumbai: Indian equity markets recorded their steepest Budget-day fall in six years on Sunday, as investors reacted sharply to a mix of policy signals, higher transaction costs and sector-specific disappointments emerging from the Union Budget 2026–27. The benchmark BSE Sensex plunged 1,547 points to close at 80,723, while the NSE Nifty 50 dropped 495 points to settle at 24,825, slipping decisively below the psychologically important 24,900 mark.
The rout erased nearly ₹11 lakh crore in market capitalisation in a single session, underlining the scale of the selloff as risk appetite weakened across sectors. Of the 50 stocks on the Nifty, 42 ended in the red, reflecting the breadth of the decline rather than pressure limited to a handful of counters.
Certified Cyber Crime Investigator Course Launched by Centre for Police Technology
Market participants pointed to a combination of factors driving the fall. While the Budget maintained a strong push on capital expenditure and long-term structural reforms, the absence of immediate triggers for earnings upgrades, coupled with higher levies in parts of the capital market ecosystem, unsettled investors already positioned cautiously. Concerns over valuation comfort, especially after the sharp run-up in equities over the past year, added to the pressure.
Banking stocks bore the brunt of the selloff. The Nifty Bank index slid 1,193 points to 58,417, dragged down by heavy selling in both public and private sector lenders. PSU banks saw particularly sharp losses, with the Nifty PSU Bank index tumbling nearly 6%, as investors reassessed growth visibility and balance-sheet trajectories following Budget announcements.
The pain was not limited to large caps. The Nifty Midcap index dropped 1,311 points to 57,121, indicating that broader market sentiment had turned decisively risk-off. Market breadth remained weak throughout the session, with the advance-decline ratio hovering at 1:2, signalling sustained selling pressure across counters.
Sectorally, metal stocks remained under stress, with the Nifty Metal index sliding around 4%, weighed down by concerns over global demand, commodity price volatility and cautious outlooks on infrastructure-linked consumption. Defence stocks also retreated, with some counters falling as much as 10%, after Budget-related spending signals failed to meet elevated market expectations built into prices.
Capital market-linked stocks were among the notable laggards following changes in securities transaction tax on futures and options. Brokerages and trading platform stocks saw sharp declines, reflecting worries over reduced retail participation and near-term revenue impact. In the midcap space, the stock exchange operator Multi Commodity Exchange of India emerged as one of the biggest losers, sliding over 11% during the session.
Elsewhere, select commodity-linked stocks also remained under pressure. Continued weakness in silver prices weighed on mining counters, while railway stocks declined after investors digested Budget provisions related to infrastructure allocations and execution timelines. EMS and electronics manufacturing services stocks ended on a mixed note, with selective buying in companies seen as beneficiaries of manufacturing incentives, even as others gave up early gains.
Market watchers said the sharp fall reflected a classic “sell on news” reaction, with traders locking in profits after weeks of pre-Budget positioning. The increase in costs for derivatives trading, combined with the lack of immediate tax or consumption boosters, acted as near-term triggers for unwinding leveraged positions.
Despite the sharp correction, analysts cautioned against reading the move as a structural breakdown. They noted that volatility around Budget sessions is not unusual and that clarity on policy execution, earnings commentary and global cues will shape market direction in the coming weeks. However, they also warned that elevated valuations leave little room for disappointment, making markets vulnerable to abrupt corrections.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
