Domestic equity benchmarks recovered from early losses and moved into positive territory in early trade on Monday after opening lower amid selling pressure triggered by the hike in Securities Transaction Tax (STT) announced in the Union Budget.
The benchmark Nifty 50 opened at 24,796.50, down 28.95 points or 0.12 per cent, while the BSE Sensex opened at 80,555.68, slipping 167.26 points or 0.21 per cent. The indices, however, soon pared losses, with the Nifty gaining around 0.3 per cent in early trade and the Sensex rising by about 372 points.
Market sentiment remained cautious following the sharp reaction after the Budget announcement, though selective buying helped the benchmarks recover from their opening lows.
Ajay Bagga, Banking and Market Expert, told ANI that further volatility could be expected in the near term. “We expect some more selling, and there will be selling at every rise. There is time until April 1 for the higher taxes to come into effect. There are many positives in the Budget, which should help Indian markets that are in a heavily oversold zone,” he said. Bagga added that the Union Budget 2026 reflects a shift from short-term stimulus to long-term structural resilience, balancing fiscal discipline with a targeted push for manufacturing and services.
Data on fund flows on Budget day showed continued selling pressure, with foreign institutional investors (FIIs) selling equities worth ₹588.3 crore, while domestic institutional investors (DIIs) were also net sellers to the tune of ₹682.7 crore.
In the broader market, performance was mixed. On the NSE, the Nifty 100 rose 0.13 per cent, while the Nifty Midcap 100 slipped 0.21 per cent and the Nifty Smallcap 100 declined 0.49 per cent.
Sectoral indices on the NSE also showed mixed trends. Nifty Auto was down 0.11 per cent, Nifty FMCG fell 0.61 per cent, Nifty IT declined 0.59 per cent, Nifty Media lost 0.40 per cent, and Nifty Pharma was down 0.5 per cent. Meanwhile, Nifty Oil & Gas and Nifty Metal traded in the green, offering some support to the market.
Gold prices continued to decline on the Multi Commodity Exchange, with gold trading at ₹143,321 per 10 grams, down about 3 per cent.
Ponmudi R, CEO of Enrich Money, said markets may remain under pressure following the negative reaction to the Budget, driven by the surprise hike in STT on derivatives. He said futures STT has been raised to 0.05 per cent from 0.02 per cent, while options STT has increased to 0.15 per cent from 0.10 per cent or 0.125 per cent, significantly raising trading costs and weighing on futures-and-options-heavy stocks and brokerage counters. He added that while DII buying could provide some support, near-term sentiment remains cautious to mildly bearish.
In other Asian markets, sentiment was weak. Japan’s Nikkei 225 fell 0.81 per cent, Singapore’s Straits Times Index declined 0.34 per cent, Taiwan’s Taiwan Weighted Index dropped 2 per cent, and Hong Kong’s Hang Seng Index slid 2.4 per cent.
-ANI
