Budget 2026 Triggers Historic Market Meltdown: Sensex Plunges 1,500 Points
The special Sunday trading session for the Union Budget 2026-27 turned into a nightmare for Indian stock markets, which were left reeling from a sharp hike in the Securities Transaction Tax (STT) on derivatives. This unexpected move by the government sent shockwaves through the financial ecosystem, triggering a massive sell-off that resulted in the worst Budget-day performance in recent history.
Unprecedented Losses: Investors Poorer by Rs 9.4 Lakh Crore
The benchmark Sensex suffered a catastrophic fall of over 1,500 points, marking its largest points loss ever recorded on a Budget day. The index closed at 80,723 points, dipping below the 81,000 mark for the first time in four months. This dramatic decline wiped out a staggering Rs 9.4 lakh crore from the Bombay Stock Exchange's (BSE) market capitalisation, representing the most significant Budget-day erosion of investor wealth in the exchange's history.
Volatile Trading Session: From Hope to Despair
The trading day was characterised by extreme volatility and emotional swings. Initially, the Sensex rallied by over 400 points as the Finance Minister began her Budget speech, reflecting early optimism among traders. However, the mood turned sour immediately after the announcement of the STT hike on derivatives, causing the index to plummet by approximately 1,100 points. A partial recovery was seen by mid-session, with the Sensex trading about 600 points down, but the selling pressure resumed towards the close, pushing the market into deep negative territory.
Nifty Follows Suit: Broad-Based Market Decline
The National Stock Exchange's (NSE) Nifty 50 index mirrored the Sensex's downward trajectory, closing 495 points lower, a decline of 2%, at 24,825 points. This broad-based sell-off indicates that the negative sentiment permeated across large-cap stocks, reflecting widespread investor dismay over the tax implications for derivative trading.
Political Backlash and Public Sentiment
Beyond the financial markets, the Budget has also drawn sharp criticism from political quarters. West Bengal Chief Minister Mamata Banerjee slammed the Centre's fiscal plan, calling it a "Humpty Dumpty budget" and claiming it offers "nothing for the common man." This political dissent adds another layer of controversy to a Budget that has already rattled the investment community.
The fallout from this Budget session underscores the delicate balance between fiscal policy and market stability, with the STT hike emerging as a pivotal factor in one of the most turbulent trading days in Indian stock market history.
