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Indian equity markets saw their sharpest Budget-day wealth erosion in five years on Sunday, with Budget 2026 standing out sharply against recent Budget outcomes. A steep hike in securities transaction tax (STT) on futures and options (F&O) triggered heavy selling, leading to a near Rs 10 lakh crore erosion in market value in a single session.

The total market capitalisation of BSE-listed companies fell by Rs 9,53,926.35 crore during the special Sunday session, making Budget 2026 the most damaging Budget for investors since FY21.

A comparison of market capitalisation movement around Budget day clearly shows how FY26 diverged from recent years.

FY26 (Budget 2026)

January market cap: Rs 4,60,02,240.35 crore

Post-Budget (Feb 1, provisional): Rs 4,50,48,314 crore

Wealth lost: Rs 9,53,926.35 crore

FY25

January 31 market cap: Rs 4,24,02,091.54 crore

February 1 market cap: Rs 4,23,84,653.29 crore

Wealth lost: Rs 17,438.25 crore

FY24

January 31 market cap: Rs 3,79,78,375.88 crore

February 1 market cap: Rs 3,79,42,444.35 crore

Wealth lost: Rs 35,931.53 crore

FY23

January 31 market cap: Rs 2,70,23,159.98 crore

February 1 market cap: Rs 2,66,53,691.42 crore

Wealth lost: Rs 3,69,468.56 crore

FY22

January 31 market cap: Rs 2,64,41,207.18 crore

February 1 market cap: Rs 2,67,40,561.79 crore

Wealth gained: Rs 2,99,354.61 crore

The data shows that while earlier Budgets saw limited declines or even gains, Budget 2026 resulted in a disproportionately large and sudden erosion of investor wealth.

The sharp sell-off followed the announcement by Finance Minister Nirmala Sitharaman of a significant hike in STT on derivatives. STT on futures trades was raised to 0.05 per cent from 0.02 per cent. STT on options premium was increased to 0.15 per cent from 0.1 per cent.

This translates into a 50–150 per cent jump in transaction costs for F&O traders. Given the dominance of derivatives in daily market volumes, the move triggered panic unwinding of positions across the market.

The BSE Sensex closed at 80,723, while the NSE Nifty 50 ended at 24,825, down 495 points or 1.96 per cent.

During the session, the Sensex plunged nearly 3,000 points to an intraday low of 79,899.42. The Nifty slipped to a low of 24,572.

Broader markets underperformed. The Nifty Midcap 100 fell 2 per cent. The Nifty Smallcap 100 declined 2.7 per cent. India VIX jumped nearly 12 per cent, reflecting sharp rise in investor anxiety.

Sectorally, all indices ended lower except Nifty IT. The Nifty PSU Bank index slumped nearly 6 per cent. The Nifty Metal index fell around 4 per cent. Nifty Bank and Nifty Financial Services declined over 2 per cent each.