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The key equity indices tumbled during the ongoing Budget 2026 proceedings. Investor sentiment weakened after the government announced an increase in the securities transaction tax (STT) on futures contracts to 0.05%. Nifty skid below 25,000 level, breaching its 200-day moving average.

Oil & gas shares plunged for the second consecutive trading session.

At 12:50 IST, the barometer index, the S&P BSE Sensex declined 994.52 points or 1.13% to 81,338.35. The Nifty 50 index tumbled 278.45 points or 1.09% to 24,994.

In the broader market, the BSE 150 Mid-Cap index declined 1.54% and the BSE 250 Small-Cap index tumbled 1.12%.

The market breadth was weak. On the BSE, 1,711 shares rose and 2,215 shares fell. A total of 217 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rallied 7.11% to 14.60.

MCX Gold futures for the 5 February 2026 settlement fell 4.30% to Rs 1,43,217, while MCX Silver futures for the 5 March 2026 settlement declined 9% to Rs 2,65,652.

Union Budget 2026

Union Finance Minister Nirmala Sitharaman is presenting her ninth consecutive Union Budget in the Lok Sabha, becoming the first finance minister in India to deliver nine budgets in a row. She said Budget 2026'27 was prepared at Kartavya Bhavan and was being presented amid a challenging global environment where trade and multilateralism have become increasingly important.

Continuing the Union Budget 2026 announcements, Union Finance Minister Nirmala Sitharaman unveiled a series of tax measures affecting capital markets, including an increase in the Securities Transaction Tax on futures contracts to 0.05%. She also announced that share buybacks will be taxed as capital gains for all shareholders, bringing their treatment in line with other equity income.

On the corporate tax front, the finance minister proposed reducing the Minimum Alternate Tax rate from 15% to 14%, and said MAT will be treated as a final tax from April 1, 2026, with no carry-forward or utilisation of MAT credit, marking a shift in the existing tax framework.

The Budget also outlined several customs duty changes to support domestic manufacturing and reduce input costs. These include exemption of basic customs duty on capital goods used for processing critical minerals, duty relief on select parts used in microwave oven manufacturing, and exemption on 17 cancer-related drugs to ease costs in critical healthcare segments.

Further measures were announced to support the aviation sector and consumers, including exemption and reduction of basic customs duty on components and raw materials used for manufacturing, maintenance and repair of civilian and defence aircraft, alongside a cut in the tariff rate on dutiable personal imports from 20% to 10%.

To strengthen India's IT services sector and attract global investment, Sitharaman announced faster timelines for concluding Advanced Pricing Agreements, reducing the process to two years with a possible six-month extension, and extending the facility of modified returns to associated entities.

She also announced a tax holiday until 2047 for foreign companies providing global cloud services using data centres in India, aimed at positioning the country as a global hub for digital and cloud infrastructure.

The Nifty Oil & Gas index declined 1.63% to 11,599.45. The index fell 2.16% in the two consecutive trading sessions.

Aegis Logistics (down 3.22%), GAIL (India) (down 2.66%), Gujarat Gas (down 2.14%), Oil & Natural Gas Corpn (down 1.99%) and Indian Oil Corporation (down 1.81%), Petronet LNG (down 1.74%), Indraprastha Gas (down 1.62%), Reliance Industries (down 1.15%), Hindustan Petroleum Corporation (down 1.14%) and Gujarat State Petronet (down 0.95%) declined.