Why Stock Market is Down on Budget Day: Sensex Slumps 2,800 Points After STT Hike

Indian equity markets saw sharp swings during the special Budget Day trading session. The Sensex and Nifty erased early gains and plunged sharply after Finance Minister Nirmala Sitharaman announced a hike in the Securities Transaction Tax (STT) on futures and options trading.

STT Hike Triggers Sell-Off

The finance minister proposed raising STT on futures trades from 0.02% to 0.05%, and on options premium from 0.10% to 0.15%. The move increased trading costs, especially for derivatives traders, leading to panic selling.

Sensex, Nifty Fall Over 3% From Day’s High

The Sensex initially climbed to an intraday high of 82,727 but later crashed to 79,899, marking a fall of 2,828 points (3.4%). Similarly, the Nifty dropped from 25,442 to 24,572, down 869 points (3.4%).

Top Losers Drag the Market

• SBI fell 5.5%, dragging the Sensex by over 210 points
• Reliance Industries slipped 2%, contributing around 170 points to the fall
• Bharat Electronics dropped 8%, while NTPC, HCL Tech, and Tata Steel fell nearly 4% each

Midcap stocks declined over 2%, while smallcaps slipped 1.7%, with overall market breadth remaining negative.

Read more: Budget 2026: Nil-Deduction Certificate Scheme Explained: What It Means for Small Taxpayers?

Conclusion

The sharp market fall on Budget Day was driven by higher STT on derivatives, which spooked traders and investors. While the move may curb risky speculation, it also raises short-term concerns over liquidity and investor confidence.

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