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

Markets witnessed a brutal selloff on Sunday, with the Sensex plunging 1,546.84 points to close at 80,722.94 and the Nifty tumbling 495.20 points to end at 24,825.45 as the Union Budget 2026-27’s proposal to increase Securities Transaction Tax (STT) on futures and options blindsided investors and triggered panic selling across sectors.

The special Budget Day session saw the Sensex fall 1.88 per cent while the Nifty dropped 1.96 per cent, marking its sharpest percentage decline since April 7, 2025, and closing at a four-month low. The carnage was widespread, with the Nifty Midcap 100 plummeting 2.24 per cent to 57,120.80, while the Nifty Smallcap 100 crashed 2.73 per cent.

The proposed STT increase from 0.02 per cent to 0.05 per cent on futures emerged as the primary catalyst for the route. “For every ₹1 lakh worth of futures sold, traders now pay ₹20 in STT instead of the previous ₹12.50,” said Ashish Singhal, Co-founder at Lemonn. “The proposed taxation on F&O is expected to raise transaction costs across the derivatives market, affecting individual investors as well as institutional participants.”

Trading turned violent after Finance Minister Nirmala Sitharaman began her budget speech at 11.00 am. “The index witnessed heightened volatility, recording an intraday swing of 869 points, which was its widest trading range since June 04, 2024,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.

Sectoral damage was extensive, with capital market, defence, and PSU bank indices bleeding over 5 per cent. Among Nifty constituents, Bharat Electronics Limited (BEL) emerged as the worst casualty, crashing 6.02 per cent to close at ₹421.95. Hindalco followed with a 5.78 per cent fall to ₹907, while ONGC dropped 5.50 per cent to ₹254.20. State Bank of India (SBI) tumbled 5.31 per cent to ₹1,020, and Adani Ports declined 5.06 per cent to ₹1,347.90.

Technology and healthcare stocks provided limited cushion. Wipro emerged as the top gainer, rising 2.12 per cent to ₹241.93, followed by Max Healthcare, which gained 1.82 per cent to ₹974.25. TCS added 1.74 per cent to close at ₹3,178.20, while Cipla climbed 1.44 per cent to ₹1,343 and Sun Pharma advanced 0.86 per cent to ₹1,609.

Market breadth remained decisively negative with 2,375 stocks declining against 1,759 advances on BSE. A total of 253 stocks hit 52-week lows compared to just 68 touching 52-week highs. The Nifty Bank index crashed 2.00 per cent to 58,417.20, while Nifty Financial Services fell 2.31 per cent to 26,699.10.

PSU banks bore the brunt of selling as the government announced gross borrowings of ₹17.20 trillion through dated securities, higher than market expectations. “The gross borrowing program is higher than anticipated and may weigh on bond market sentiment in the near term,” said Deepak Agrawal, CIO-Debt at Kotak Mahindra AMC. “Government bond yields are likely to edge higher, with the 10-year benchmark expected to trade in the 6.65–6.75 per cent range.”

Metals witnessed heavy selling as copper futures on MCX plummeted over 5 per cent while gold and silver futures crashed more than 5 per cent and 9 per cent respectively.

“On daily charts, it has formed a long bearish candle, and it is currently trading below the 200-day SMA, which is largely negative,” said Shrikant Chouhan, Head Equity Research at Kotak Securities. “Technically, after a sharp intraday dip in the second half of the day, the market trimmed some losses.”

Looking ahead, analysts expect continued volatility with the zone of 24,700–24,650 acting as immediate support for the Nifty. “A sustained move below 24,650 may accelerate the downside momentum towards 24,500, followed by 24,350 in the short term,” said Shah, while resistance is pegged at 25,000-25,200 levels.

Published on February 1, 2026

Shares of Sun Pharmaceutical Industries on Sunday ended nearly 1 per cent higher after the firm posted a 16 per cent increase in its consolidated net profit for the third quarter ended December 31, 2025.

The stock ended at ₹1,610.20, up 0.95 per cent on the BSE. During the day, it climbed 3.81 per cent to ₹1,655.80.

At the NSE, the stock advanced 0.92 per cent to end at ₹1,610.10. During the day, it edged higher by 3.78 per cent to ₹1,655.70.

Sun Pharmaceutical Industries on Saturday posted a 16 per cent increase in its consolidated net profit to ₹3,369 crore for the third quarter ended December 31, 2025, led by growth across business segments.

The Mumbai-based drug major reported a net profit of ₹2,903 crore for the October-December quarter of last fiscal.

Total revenue from operations rose to ₹15,520 crore for the third quarter as against ₹13,675 crore in the year-ago period.

The company said its board has approved an interim dividend of ₹11 per equity share of Re 1 for the financial year 2025-26.

“Our results this quarter demonstrate well-rounded growth across all businesses, prominently led by our branded businesses in India, emerging markets and global innovative medicines,” Sun Pharma MD Kirti Ganorkar said in a statement.

Published on February 1, 2026

The individual investment cap rises from 5% to 10%, while the aggregate limit for all such investors jumps from 10% to 24%. The move aims to broaden India’s equity capital base, improve market depth, and attract stable, long-term capital. | Photo Credit:

In a bid to allow non-resident individuals (NRIs) and overseas investors to take larger direct stakes in Indian listed companies, the Union Budget has sharply increased the investment limits under the Portfolio Investment Scheme (PIS).

Under the proposed framework, the individual investment cap has been raised from 5 per cent to 10 per cent, while the aggregate limit for all such investors has been increased from 10 per cent to 24 per cent.

Previous Restrictions

Earlier, the relatively low ceilings on participation by overseas individuals restricted the scale of participation, forcing most foreign equity flows to come through the registered Foreign Portfolio Investor (FPI) route rather than through direct shareholding.

The government’s move is aimed at broadening the equity capital base, improving market depth and attracting longer-term, more stable pools of capital, particularly from the Indian diaspora.

“This represents a structural shift, not a marginal tweak. Until now, foreign capital largely flowed through institutional channels—FPIs, offshore funds, the usual suspects. By opening direct access to individuals, India is diversifying its capital base, which should, over time, reduce volatility, improve liquidity and bring longer-duration money into the market,” said Mitesh Shah, CEO at Equirus Family Office.

Overseas inflows

Enhanced flexibility in this framework is expected to also support market liquidity and more efficient price discovery, said Moin Ladha, Partner at Khaitan & Co. “It is likely to facilitate greater participation of NRI capital and improve access to stable, long-term overseas funds. Going forward, continued clarity and calibrated liberalization in this space would be welcome, as they can play a meaningful role in strengthening foreign investment inflows into India,” Ladha said.

Tanvi Kanchan, Associate Director and Head of NRI Business at Anand Rathi Share and Stock Brokers, said, “These increases enable foreign investors to build more substantial positions in Indian companies, which could enhance market efficiency, broaden the shareholder base, and foster stronger long-term investment in Indian capital markets.”

Greater participation

Analysts expect the change to encourage greater participation from NRIs in fundamentally strong companies and reduce reliance on short-term foreign flows. The actual impact, however, will depend on ease of execution, regulatory clarity and overall market sentiment. Over time, greater direct overseas ownership could improve price discovery, enhance corporate governance by broadening the investor base, and make Indian markets more resilient to volatile global capital flows.

Published on February 1, 2026

Derivatives segment accounts for a significant share of revenues for brokerage platforms.

Shares of listed broking firms such as BSE Ltd, Angel OneGroww, nuvma and IIFL Capital Services came under sharp selling pressure after the increase in Securities Transaction Tax (STT) on futures and options, sparking concerns over trading volumes and near-term profitability for capital market intermediaries.

BSE shares closed 8 per cent lower at ₹2,578.10, after plunging 15 per cent to ₹2,377.40 against the previous close of ₹2,797. CDSL traded 7 per cent lower at ₹1,229.30.

Angel One shares tanked 9 per cent to end at ₹2,313. The stock dragged over 13 per cent to ₹2,199.50 during the session from the previous close of ₹2,540.90.

Billionbrains Garage Ventures (Groww) shares fell 14 per cent to ₹152.52 before settling with 5 per cent loss at ₹168.10.

IIFL Capital Services stock plunged over 17 per cent to ₹272.60 in early trade.

In addition, Nuvama Wealth Management and 360 ONE WAM also witnessed significant sell-off.

The increased STT on futures contracts and on options premium could cool participation in the derivatives segment, which accounts for a significant share of revenues for brokerage platforms, according to analysts.

Jateen Trivedi, VP – Research Analyst (Commodity and Currency) at LKP Securities, said markets were already uneasy about the fiscal deficit target of 4.3 per cent for FY27, but the sharper reaction stemmed from the higher transaction levies. He noted that the STT hike is likely to dent participation in futures and options and could also reduce speculative volumes in commodities.

Dhiraj Relli, Managing Director and CEO of HDFC Securities, described the market’s initial reaction as largely knee-jerk, driven by the revised tax framework for derivatives. While acknowledging that the enhanced STT regime may create near-term headwinds for capital market participants, Relli said the Budget reflects a pragmatic and calibrated policy approach. He added that investors should remain focused on sectors with strong earnings visibility rather than capital-intensive plays, and argued that the government’s long-term vision for market stability and maturity could ultimately benefit the broader financial ecosystem through FY27.

Echoing concerns around trading activity, Shripal Shah, Managing Director and CEO of Kotak Securities, said the steep increase in STT on futures and options, coming on top of last year’s hike, is likely to raise impact costs for traders, hedgers and arbitrageurs. According to him, this could cool derivative activity and lead to lower volumes, with the intent appearing to be moderation rather than revenue maximization, as any tax gains may be offset by reduced turnover.

Aakash Shah, Technical Research Analyst at Choice Equity Broking, warned that the STT increase could act as a marginal negative for foreign portfolio investor flows in the near term, particularly for high-frequency and derivative-focused global funds. He pointed out that higher transaction costs meaningfully reduce post-tax returns for active strategies at a time when overseas investors have already been cautious due to global risk-off sentiment, elevated US bond yields and currency pressures.

Shah added that while long-only, fundamentally driven FPIs are unlikely to be deterred solely by the STT hike, the higher costs could marginally shift tactical allocations toward other Asian markets. Overall, he said the move risks dampening trading volumes and slowing short-term foreign participation, even as broader inflows will continue to hinge on macro stability, rupee movement and consistency in tax policy.

Amit Majumdar, Group Chief Strategy Officer, Angel One Ltd, has said that F&O brokerage contributed about 44 per cent of gross revenue, while interest income from client funding and our broader platform accounted for around 33 per cent in Q3FY26, with the rest coming from cash and commodity broking, depository, distribution, and other income streams. “This diversified mix reinforces the resilience of our model and gives us confidence that the broader trajectory of our business remains firmly intact.”

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Published on February 1, 2026