Indian Stock Markets Decline Following STT Increase in Union Budget 2026

Indian equity markets experienced significant declines on Sunday following the Union Budget 2026's announcement of increased Securities Transaction Tax (STT) on futures and options trading. The BSE Sensex fell 1,546.84 points, or 1.88%, closing at 80,722.94, while the NSE Nifty 50 dropped 495.20 points, or 1.96%, ending at 24,825.45.

Finance Minister Nirmala Sitharaman proposed raising the STT on futures contracts to 0.05% from 0.02%, and on options premiums to 0.15% from 0.10%.

The market capitalization of all listed companies on the BSE decreased by ₹9.72 lakh crore to ₹450.15 lakh crore.

Shares of brokerage firms and stock exchanges were notably affected. BSE shares declined by 8%, and Angel One dropped 8.6%, reflecting concerns that higher transaction costs could dampen derivatives trading volumes.

Amisha Vora, Chairperson & Managing Director of PL Capital, commented, "The only real negative in the Budget is the increase in STT on derivatives, and that’s what the market is reacting to in the short term. Overall, once the STT headline settles, the Budget should be seen as growth supportive."

The sell-off was broad-based, with small-cap and mid-cap indexes sliding about 3% and 2%, respectively, indicating a risk-off sentiment across the market.