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Indian equity markets declined after the presentation of the Union Budget 2026, as investors reacted to the absence of major triggers and unmet expectations. Volatility was seen during the session, with sharp intraday swings before a partial recovery.

The BSE Sensex fell 1,546.84 points to 80,722.94, while Nifty 50 slipped 495.20 points to 24,825.45.

Market veteran and investor Vijay Kedia said the post-Budget fall was driven more by sentiment and expectations rather than any single negative announcement. “The market had created many expectations from the Budget. When those expectations were not met, there was disappointment,” Kedia said.

He said the increase in Securities Transaction Tax on futures and options should not be seen as the sole reason for the market decline. “STT should not be counted in isolation. Futures and options trading had become highly speculative,” he said.

Kedia said the sharp fall seen during the day was temporary in nature. “At one point, the market fell 2,100 to 2,400 points, but it recovered later. These moves are temporary and get shaken out by the close,” he said.

He added that the Budget did include several positive measures, but the overall tone lacked strong growth signals. “We are talking about a $4.5 trillion economy, but the body language still seems to be based on a much smaller economy,” Kedia said, adding that a clearer picture would emerge once detailed Budget documents are studied.

On foreign institutional investors, Kedia said the Budget was unlikely to immediately stop selling by overseas investors. “I personally do not think FII selling will stop because of this Budget,” he said.

He said foreign inflows would depend on stronger economic growth. “When nominal GDP growth moves into double digits, that is when large foreign money can come into the market,” Kedia said.

Kedia said markets are likely to remain range-bound in the near term. “The market is unlikely to cross its earlier highs anytime soon, and the recent lows are also unlikely to break,” he said.

He added that the market has already turned selective over the past several months. “Most mid-cap and small-cap stocks are already down 30 to 60 per cent. Some index stocks have held up, but the broader market has corrected,” he said.

Kedia said investors should focus on stock-specific opportunities. “This is a phase for selective buying and bottom-up stock picking. Companies with strong balance sheets and growth visibility will do better,” he said.

He said sectors such as infrastructure and tourism could offer opportunities over the long term. “Without infrastructure development, India cannot become a $10 trillion economy. Employment generation also improves through infrastructure and tourism,” Kedia said.

Kedia said the market phase after the Budget should be viewed as a transition rather than a breakdown. “The Budget has come and gone. From tomorrow, the market will return to its usual course,” he said.

Market breadth remained weak at the close of trade on February 1, 2026. Out of 3,227 stocks traded, 2,073 stocks declined, while 1,054 advanced and 100 remained unchanged.

Only 30 stocks touched their 52-week highs, while 210 stocks hit 52-week lows, reflecting broad selling pressure. As many as 105 stocks ended in the upper circuit, while 117 stocks were locked in the lower circuit. The total market capitalisation stood at Rs 448.74 lakh crore.