Day after Budget, Sensex surges 942 points; Nifty reclaims 25,000

A day after suffering one of its sharpest Budget-day declines, Indian equity benchmarks staged a rebound on Monday, with investors stepping in to lap up beaten-down blue-chip stocks even as questions linger over the government’s higher borrowing programme.

The BSE Sensex climbed 942.27 points to 81,665.21, while the NSE Nifty rose 264.65 points to 25,090.10, reclaiming the 25,000 mark. The recovery comes after Sunday’s nearly 2 per cent slide, triggered by the Union Budget 2026–27 proposal to raise the Securities Transaction Tax (STT) on futures and options (F&O), a move aimed at curbing speculative trading.

On Sunday, the 30-share Sensex had slumped as much as 2.9 per cent intraday following the Budget announcements before settling 1.9 per cent lower at 80,722.94 — its second-sharpest Budget-day fall since 2014. The Nifty 50 ended 2 per cent down at 24,825.45, reflecting broad-based weakness amid the absence of immediate positive triggers.

The proposed hike in STT on derivatives unsettled traders, particularly in the high-volume F&O segment, which has seen explosive growth in retail participation over the past few years. Government officials have repeatedly flagged concerns over excessive speculation in options trading, and the Budget move signals a clear intent to temper froth in the segment.

However, while the STT hike may weigh on short-term sentiment in derivatives-heavy counters and brokerage stocks, the broader macro framework outlined in the Budget remains broadly on expected lines.

Rupee gains on softer crude

In the currency market, the rupee strengthened by 37 paise to 91.56 against the US dollar in early trade on Monday, aided by a pullback in global crude oil prices from recent highs.

Forex traders said the currency found some support as oil prices eased, reducing immediate pressure on India’s import bill. However, they cautioned that the Budget offered “reassurance, not relief” for currency markets.

The government has projected a fiscal deficit of 4.3 per cent of GDP for 2026–27 and plans to borrow Rs 17.2 lakh crore in the next financial year. While the deficit target is seen as broadly credible, the sizeable borrowing programme could keep bond yields elevated and cap further gains in the rupee.