Gift Nifty futures were trading at 24,869.5 points as of 8:00 am IST, indicating the benchmark Nifty 50 index will open near Sunday’s close of 24,825.45.

The equity benchmarks are likely to open little changed on Monday, following a broad-based sell-off during a special trading session on Sunday, as the Union Budget failed to deliver on key measures to draw foreign investors.

Gift Nifty futures were trading at 24,869.5 points as of 8:00 am IST, indicating the benchmark Nifty 50 index will open near Sunday’s close of 24,825.45.

The benchmark indexes slid about 2% the previous day, logging their biggest percentage drop on ⁠a Budget day trading session in six years, as investors digested the government’s Budget for fiscal year 2026-27.

Analysts at Jefferies said the lack of capital gains-related relaxations for foreign portfolio investors in the Budget was a negative considering the outflows and weak rupee.

Overseas investors have sold a record amount of Indian equities, totaling $22.9 billion since 2025, and the rupee has weakened sharply to all-time lows.

“An increase in the Securities Transaction Tax on futures and options would also dampen some equity market sentiments,” Jefferies added.

“While DII (domestic institutional investors) buying could offer some support, near-term sentiment remains cautious to mildly bearish as market participants reassess positioning in anticipation of higher F&O costs,” said Ponmudi R, chief executive officer of Enrich Money.

Market sentiment was also weighed down by a higher gross borrowing target, which analysts said could raise bond yields and negatively impact rate-sensitive sectors.

Among stocks, ⁠Hero MotoCorp will be in focus on Monday after it reported a 26% year-on-year rise in two-wheeler sales in January, led by growth in both domestic ⁠and export volumes.

Published on February 2, 2026

Gold fell, following its biggest plunge in more than a decade, and silver whipped sawed in choppy trading after a dramatic pullback from record highs.

Spot gold fell as much as 6.3% on Monday. Silver swung sharply, dropping to around $75 an ounce having previously climbed as much as 3.2%. The white metal recorded its biggest ever intraday loss in the previous session.

“This isn’t over,” said Robert Gottlieb, a former precious metals trader at JPMorgan Chase & Co. and now an independent market commentator, adding that a reluctance to take further risk would constrain market liquidity. “We’ve got to see if it’s going to find support. The bottom line is that the trade was way too crowded.”

Over the last year, precious metals have risen to all-time highs that have shocked even seasoned traders. The rally accelerated sharply in January, as investors piled into gold and silver on renewed concerns about geopolitical upheaval, currency debasement and the independence of the Federal Reserve. A wave of buying from Chinese speculators added froth to the rally.

The trigger for Friday’s dramatic selloff was the news that US President Donald Trump would nominate Kevin Warsh to lead the Fed, which sent the dollar higher and undercut sentiment among investors who had bet on Trump’s willingness to let the currency weaken. Traders regard Warsh as the toughest inflation fighter among the final candidates, raising expectations of monetary policy that would underpin the dollar and weaken greenback-priced bullion.

But precious metals had already been primed for extreme moves, as soaring prices and volatility strained traders’ risk models and balance sheets. A record wave of purchases of call options — contracts which give holders the right to buy at a pre-determined price — were “mechanically reinforcing upward price momentum,” Goldman Sachs Group Inc. said in a note, as the sellers of the options hedged their exposure to rising prices by buying more.

Gold fell 4.4% to $4,680.76 an ounce as of 9:21 am Singapore time. Silver declined 2.2% to $83.2965. Platinum and palladium declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, rose 0.1% after gaining 0.9% in the previous session.

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Published on February 2, 2026

By ring-fencing tax benefits, the government emphasizes long-term investment in sovereign instruments and ensures uniform treatment across all SGB issuances, promoting stable investment behavior and discouraging short-term speculative trading. | Photo Credit: lakshmiprasad S

The Budget has clarified that the capital gains tax exemption on sovereign gold bonds will not apply to investors who purchase them in the secondary market and hold them to maturity.

With the sharp rise in gold prices, the change in tax benefits for SGBs will be a major money-spinner for the Government.

Original Investors Benefit

The shift means only original subscribers who hold their SGBs to maturity will get the full tax exemption, while all second-hand buyers will lose it from April 1.

The announcement triggered a sharp 6-10 per cent decline in SGBs across maturities traded on stock exchanges.

There are 46 outstanding sovereign gold bonds traded on the stock exchanges and their maturing starts from December 2026 to December 2031.

Expert Views

Chirag Mehta, CIO, Quantum AMC, said the tax implications will reduce the attractiveness of SGBs, and that people have a better option for investing in exchange-traded funds.

The liquidity of SGB traded on the exchange will also decline sharply, he added.

The sharp run-up in gold prices will not be of much help to SGB investors, as they have to cough up more capital gains tax for every rise in gold prices, he added.

Tax-Efficient Past

For long, SGBs were the most tax-efficient investment products, as investors received 2.5 per cent interest each year and enjoyed complete exemption from capital gains at maturity, regardless of whether they bought the bond from the RBI at issue or picked it up later on the stock exchange.

The government now intends to ring-fence the tax benefit around original issuance. The aim is to remove arbitrage created by investors who bought older SGB series at discounts and still claimed tax-free redemption.

Legal Insight

Rajesh Sivaswamy, Senior Partner, King Stubb & Kasiva, Advocates and Attorneys, said the government move removes any ambiguity regarding secondary market purchases and aligns the tax treatment strictly with the intent of encouraging long-term investment in SGBs.

Holding to Maturity

The measure underscores the importance of holding SGBs to maturity to avail the capital gains exemption and highlights the government’s emphasis on promoting stable, long-term investment in sovereign instruments, he added.

Rajarshi Dasgupta, Executive Director – Tax, AQUILAW, said the capital gains exemption will now be available only to individuals who subscribe to the bonds at the time of the original issue and hold them to maturity.

The Budget also specified that this exemption will apply uniformly across all issuances of SGBs by RBI, ensuring a consistent and standardized tax benefit for eligible investors, he added.

Published on February 1, 2026

Nifty50 and Sensex were beaten down badly on the Budget Day. The benchmark indices were down 1.96 per cent and 1.88 per cent respectively for the day. Indeed, both the indices fell almost 3 per cent in their intraday trades and then managed to recover some losses from their lows.

The trigger for this sharp intraday fall came after the Finance Minister Nirmala Sitaraman announced the increase in the Security Transaction Tax (STT) for F&O transactions. The STT in Futures transaction is increased from 0.02 per cent to 0.05 per cent. In Options, the STT on both the option premium and exercise of options will now be 0.15 per cent. Previously, the STT rates were at 0.1 per cent (for Option Premium) and 0.125 per cent (exercise of options).

Sectoral performance

Barring the IT/Technology sectors, all others ended the Budget Day in red. The BSE Information Technology index rose 0.66 per cent for the day.

The BSE PSU Bank and the BSE PSU index fell the most. The indices were down 5.6 per cent and 4.17 per cent respectively. The BSE Metals, BSE Commodities, BSE Energy and BSE Capital Goods indices were also down over 3 per cent each.

What’s in store for these sectors after this fall? Here, we give two sectors that are still looking good in the charts despite the sharp fall on this Budget Day. Also, we give two sectors in which investors have to take a cautious stance following today’s fall.

Please note that the view given below is based purely on the historical price movement using technical analysis. No fundamental study is involved.

still good

BSE PSU(20,588.76): Strong support for the index is at 19,950 and 18,900. On the chart, there is a bullish inverted head and shoulders pattern visible, which strengthens the bullish case. So, as long as the above-mentioned supports hold, the bias will remain bullish. The BSE PSU index has the potential to rise to 23,000 and even 24,500 in the coming months.

Any further fall from here can be considered as a good buying opportunity.

BSE Energy (11,544): The index is currently hovering above a key long-term trendline support level of 11,280. Below that, the next support is available immediately at 11,150. The chances for the index to bounce back from either of these two supports are good. That leg of rise can take the BSE Energy index up to 12,700 initially. A decisive break above 12,700 will then clear the way for a rally to 14,000 over the long term.

This bullish view will go wrong only if the index breaks below 11,150. If that happens, a fall to 10,500 can be seen.

be cautious

BSE Metals (37,349): The index made a high of 41,045.73 last week and has come down sharply from there. This reversal is very important. Because it is happening from just below a strong long-term resistance level of 41,500. It indicates that a top is already in place. So, there is not much room left for an upside even if the index recovers from current levels.

The index can fall to 36,000 or even 35,200-34,700 from here. Failure to bounce thereafter and a fall below 34,700 will be very bearish. In that case, there is a danger of seeing 33,000-32,800 on the downside.

BSE Capital Goods (64,655): The index is hovering around a key trendline support level of 64,000. The bias is looking negative to break this support. Such a break can drag the index down to 56,000.

Short-term resistance is in the 67,000-68,000 region. Higher resistance is around 72,000. Ideally, the BSE Capital Goods index has to rise above 72,000 to turn the outlook convincingly bullish. That looks less likely at the moment.

Published on February 1, 2026