Union Budget 2026: Worst Effect On Stock Market!

The union budget for the year 2026 was officially communicated by the central government in the Parliament yesterday, and this has already started to have repercussions on the stock market as well.

The Indian stock market witnessed a sharp and unexpected collapse on Budget day, leaving investors rattled and wiping out massive wealth in a single session. On the rare Sunday trading held to coincide with the Union Budget presentation, equity benchmarks ended with their worst Budget day performance in nearly six years.

The BSE Sensex plunged over 1,500 points by the close, while the NSE Nifty50 fell close to 2 percent, slipping below the crucial 24,850 mark.During intraday trade, the sell off was even steeper, with the Sensex tumbling nearly 2,800 points from the day’s high and the Nifty losing close to 900 points at its lowest level. Overall market capitalisation declined by an estimated ₹10 lakh crore, reflecting the scale of investor panic.

The sharp fall was largely triggered by the government’s decision to increase the Securities Transaction Tax on futures and options trading. This move hit sentiment hard in the derivatives heavy market, leading to aggressive selling across financials, PSU banks, metals and realty stocks. Realty stocks alone fell up to 10 percent intraday, while midcap and smallcap indices also ended deep in the red.

Market experts believe the reaction reflects short term disappointment over higher trading costs and the absence of strong growth boosting announcements. While some stabilisation is expected in the coming sessions, the Budget day crash has clearly dented near term confidence on Dalal Street.