Indian equity benchmarks staged a sharp recovery on Monday, snapping a steep two-day losing streak triggered by the Union Budget 2026 announcement, as investors returned to fundamentally strong stocks after Sunday’s heavy sell-off. The BSE Sensex surged 1,001 points, or 1.24%, to close at 81,682.17, while the NSE Nifty 50 jumped 263 points, or 1.06%, to end at 24,635.55, marking a strong rebound after one of the worst Budget-day falls in recent years.Markets had tumbled on Sunday after the government announced a hike in Securities Transaction Tax (STT) on derivatives, sparking panic selling across segments.
The stock markets fell 2% Sunday as Budget 2026-27 proposed a hike in Securities Transaction Tax (STT) for futures and options (F&O) aiming to further curb what government officials called speculative trading. With the absence of any immediate positive triggers also dampening sentiment, the 30-stock BSE Sensex slumped as much as 2.9% intraday after the announcement before ending at 80,722.94 points, down 1.9% from Friday. This was the second sharpest fall on Budget day since 2014. Meanwhile, the Nifty 50 — the National Stock Exchange’s (NSE) flagship index — closed 2% lower at 24,825.45 points.
Heavyweights including Reliance Industries, HDFC Bank, ICICI Bank, Larsen & Toubro, and Infosys led the rebound, contributing significantly to the benchmarks’ gains. Banking and IT stocks witnessed strong buying interest, while FMCG and capital goods stocks also did better. Market participants said today’s rebound suggests that Sunday’s sell-off was largely a knee-jerk reaction to the surprise tax move rather than a reflection of deteriorating economic fundamentals. Silver ETFs have experienced a significant decline for three consecutive sessions as global bullion prices drop sharply. Major ETFs fell 20%, while MCX Silver rate dropped 15%, reflecting volatility and profit-booking amidst rising dollar strength and increased margin requirements.