Indian Equity Markets Witness Robust Recovery After Budget Day Volatility
Indian stock markets staged a remarkable recovery on Monday, with benchmark indices bouncing back strongly following the significant sell-off witnessed during the Budget-day session. The resurgence was primarily driven by value buying in key blue-chip sectors including oil and gas, banking, and automobile stocks, marking a notable turnaround from the previous trading day's bearish sentiment.
Benchmark Indices Register Substantial Gains
The 30-share BSE Sensex demonstrated impressive resilience, surging by 943.52 points, equivalent to 1.17 percent, to conclude the trading session at 81,666.46. During intraday trading, the index exhibited even stronger momentum, climbing as much as 1,009.31 points, or 1.25 percent, to reach a peak of 81,732.25.
Similarly, the NSE Nifty 50 displayed robust performance, advancing by 262.95 points, representing 1.06 percent, to settle at 25,088.40. The broader index had earlier climbed 282.65 points, or 1.13 percent, achieving an intraday high of 25,108.10.
Contextualizing the Recovery Against Budget Day Decline
This substantial recovery follows the sharp downturn experienced on Budget day, when market sentiment was significantly impacted by concerns surrounding fiscal proposals. During that session, the Sensex had plummeted by 1,546.84 points, or 1.88 percent, closing at 80,722.94, while the Nifty had declined by 495.20 points, or 1.96 percent, settling at 24,825.45.
The Budget day volatility was primarily attributed to investor apprehensions regarding two key announcements:
- The proposed increase in securities transaction tax (STT) on derivatives trading
- Higher government borrowing projections for the upcoming fiscal year
Top Performers and Underperformers Across Indices
The Nifty 50 index witnessed several standout performers during Monday's recovery:
- Power Grid Corporation led the gains with an impressive 7.75 percent surge
- Tata Motors followed with a solid 5.49 percent increase
- Adani Ports and Special Economic Zone advanced by 4.30 percent
- Tata Consumer Products rose by 3.71 percent
- Bharat Electronics Limited gained 3.52 percent
- Reliance Industries Limited increased by 3.11 percent
- Adani Enterprises climbed 2.86 percent
- Mahindra & Mahindra advanced by 2.82 percent
- Hindalco Industries rose by 2.88 percent
- Larsen & Toubro gained 2.77 percent
- InterGlobe Aviation increased by 2.17 percent
Conversely, certain stocks faced selling pressure, with Shriram Finance declining by 3.56 percent and Axis Bank dropping 2.16 percent among the notable underperformers.
The Sensex mirrored similar trends, with Power Grid leading at 7.58 percent gain, followed by Adani Ports SEZ at 4.33 percent, and Bharat Electronics Limited at 3.24 percent increase.
Market Analysts Weigh In on Recovery Dynamics
Vinod Nair, Head of Research at Geojit Investments Limited, provided valuable insights into the market movement: "The market witnessed a smart recovery following yesterday's volatile session due to the impact of the STT hike on F&O and the government's higher borrowing plan for FY27. At the same time, the Budget's policy continuity with a clear emphasis on growth and fiscal prudence has helped reinforce confidence in the medium- to long-term earnings outlook."
Nair further elaborated on external factors influencing market sentiment: "A sharp decline in global crude oil prices has also offered some relief, reflecting signs of easing geopolitical tensions between the US and Iran."
Ponmudi R, CEO of Enrich Money, offered additional perspective: "Indian equity markets opened the week with a measured rebound after the sharp Budget Day sell-off, as participants continued to recalibrate positions following the nearly 2 percent decline witnessed during the Union Budget 2026-27 session. While selective value buying in large-cap names offered some near-term stability, overall sentiment remained guarded amid elevated volatility."
Institutional Activity and Market Sentiment Indicators
Despite the overall market recovery, foreign institutional investors (FIIs) maintained a cautious stance, emerging as net sellers during the session. According to exchange data, FIIs offloaded equities worth Rs 588.34 crore, indicating continued reservations among international investors regarding recent fiscal developments.
The combination of domestic policy clarity, easing global commodity prices, and selective institutional participation created a complex but ultimately positive trading environment that allowed Indian equities to recover substantial ground lost during the previous session's Budget-related sell-off.
