Nifty Outlook: Tremendous selling was seen in the Indian stock market in the special trading session held for the Union Budget 2026. As soon as Finance Minister Nirmala Sitharaman announced an increase in Securities Transaction Tax (STT) on Futures and Options (F&O) trading by 150%, the market sentiment completely changed. Nifty 50 fell to 24,572 intra-day due to panic selling.
Picture changed in just 90 minutes
There was no significant movement in the market till the budget speech started. But after 11 am the atmosphere deteriorated rapidly. Within just 90 minutes, Nifty fell 869 points from its intra-day high.
There was a slight recovery in the middle session and the index recovered 577 points to reach 25,148, but this relief did not last long. Selling came again and the market again lost more than 400 points.
lowest close in four months
Despite recovering more than 500 points from the day’s low, Nifty 50 ultimately closed at 24,825, down 495 points or 1.96%. This was the lowest close of Nifty in the last four months. Along with this, it is also considered to be the biggest one-day fall after April 7, 2025.
STT increase became the reason for decline
The biggest reason for this sharp selling in the market was the sudden and huge increase in STT on derivatives trading. The government’s objective may have been to reduce retail speculation, but this decision proved to be shocking for the market. Investors started cutting positions rapidly to reduce risks.
Value of ₹11 lakh crore cleared
Due to this selling, about ₹ 11 lakh crore was wiped out from the total market cap of BSE listed companies. Such a huge fall in a single trading session was a big shock for investors.
Which stocks showed strength
Most of the Nifty stocks closed in the red, but Wipro, Max Healthcare and TCS outperformed the market and were among the top gainers. On the other hand, BEL, Hindalco and ONGC were among the biggest falling stocks.
Only IT sector remained green
At the sector level, only Nifty IT index could close with gains. All other sectoral indices remained in decline. The most pressure was seen on PSU bank, metal and oil and gas shares.
A major reason for the fall in PSU bank shares was the increased borrowing targets of the government. This increased concerns about rising bond yields and MTM losses on banks’ bond portfolios.
The decline in midcap and smallcap stocks was sharper than the main index. Nifty Midcap 100 fell by 2.24% and Nifty Smallcap 100 fell by 2.73%.
impact of commodity decline
The pressure on metal stocks increased further when copper futures on MCX fell by more than 5%. Gold and silver also slipped rapidly. There was a decline of more than 5% in gold futures and about 9% in silver.
India lagging behind global markets
In 2025, the Indian stock market still seems to be lagging behind the global markets. Nifty 50 is up by about 10% on annual basis. At the same time, markets like KOSPI of South Korea have shown a rise of 20% to 65%.
Concern about money also
Market experts have also expressed concern about the weakness of the rupee. It is estimated that the rupee may fall further by about 1%. However, due to the currency market being closed on the budget day, its immediate effect was not visible.
Expert opinion on Nifty
HDFC Securities’ Technical Analyst Nandish Shah says that Nifty has clearly broken the consolidation range of 24,900-25,450. With this, the index has gone below both the 200-day SMA and 200-day EMA. This is a sign that a positional downtrend has started once again in the market.
According to Nandish Shah, immediate support for Nifty is seen at the level of 24,571 and 24,337. At the same time, on the upside, the range of 25,000 to 25,150 can become a strong resistance in the short term.
Risk of further decline
Sudeep Shah of SBI Securities says that the zone of 24,700-24,650 will remain an important support for Nifty for the time being. If the index remains below this level, the decline could be sharper.
According to him, if there is continuous weakness below 24,650, Nifty may first slip to 24,500 and then to 24,350. Overall, technical signals are advising caution in the market right now.
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