The Nifty index experienced a 500-point decline which resulted in a final value of 24,850 following the announcement of the Union Budget 2026. The Sensex declined 1,547 points to reach 80,723 which represented one of the largest Budget-day declines during the past six years.

The Nifty Bank index showed severe losses because it dropped 1,193 points to reach 58,417 while the Midcap index decreased by 1,311 points to 57,121. The market showed negative breadth because investors sold off their stocks throughout various sectors, which created an advance-decline ratio of 1:2.

Sectoral Impact:

• Metal stocks bore the brunt of the sell-off, with the Nifty Metal index down 4%, and companies like Hindalco and Hind Zinc falling sharply.
• Defence equities declined up to 10%, following the budget allocation and revised capital expenditure plans.
• PSU banks slid 6%, while MCX was one of the top midcap losers, down over 11%.
• Capital market players such as Angel One and BSE Ltd dropped after the STT hike on futures and options.

Budget Highlights Affecting Markets:

• Defence spending raised to ₹7.85 lakh crore, a 15.2% increase over FY26.
• Education Ministry allocated over ₹1.4 lakh crore, a 14% rise.
• Tourism, urban infrastructure, and manufacturing sectors received focused attention, with the AMRUT scheme allocation reduced to ₹8,000 crore.
• Tax incentives announced for data centres for 22 years, while STT hike on derivatives impacted trading sentiment.

Expert Reactions:

• Gurmeet Chadha, CIO, Complete Circle, noted that metal and defence sell-offs were expected, and emphasized the need for market stability and policy predictability.
• Amit Jeswani, Stallion Asset, called the STT hike unexpected, pressuring Nifty and market sentiment.
• Dinesh Kanabar, Dhruva Advisors, welcomed TCS and TDS simplifications, which could support cash flows for foreign investments.

Auto & EV Sector:

• TVS Motor reported 29% YoY growth, 2-wheeler sales up 28%, and EV sales surged 50%.
• Ashok Leyland saw 27% increase in total sales, driven by domestic M&HCV growth of 25%.

Outlook: The upcoming Budget 2026 market assessment will create ongoing market instability which analysts believe investors will track through three key factors. The fiscal deficit projection of 4.3% of GDP and the sectoral allocation and the capital market regulatory changes will be closely watched by investors.