Union Budget 2026: The Union Budget 2026 announced a further increase in Securities Transaction Tax (STT) on futures and options (F&O). This is the second time in two years that the tax has been raised.
Under the new rates, STT on options has increased from 0.1% to 0.15%, while STT on futures has gone up from 0.02% to 0.05%. Following the announcement, the stock market saw a sharp fall. During the day, the Sensex dropped by nearly 2,000 points, while the Nifty fell by around 700 points. At 1 pm, the Sensex was down 600 points at 81,700, and the Nifty was 220 points lower at 25,100.
Most Stocks and Sectors Trade Lower
Out of the 30 stocks on the BSE Sensex, only three were trading higher, while 27 were in the red. Except for Sun Pharma, TCS, and Kotak Mahindra, most stocks fell by up to 8%.
All major sectors, including auto, pharma, FMCG, and banking, were under pressure. PSU bank stocks also saw heavy selling.
Shares of BSE and Groww dropped sharply. Vedanta, Hindustan Zinc, and Hindustan Copper also recorded major losses. Early in the session, Hindustan Zinc fell 10%, Hindustan Copper dropped over 18%, Hindalco declined 7%, and NALCO slipped about 5%.
Market Capitalisation Drops by Rs 8 Lakh Crore
The sharp sell-off led to a big fall in market value. The BSE market capitalisation fell by Rs 8 lakh crore, from Rs 460 lakh crore on Friday to Rs 452 lakh crore today.
What is STT?
Securities Transaction Tax (STT) is a tax charged on the buying and selling of shares and derivatives in the stock market. In Budget 2026, the government increased STT on F&O premium transactions, making trading costlier for investors.
Boost for Foreign Investment
In a positive move, the government announced that Persons of Indian Origin (PIOs) living abroad will now be allowed to invest in Indian markets. This step is expected to attract more foreign investment into the country.
While most sectors fell, defence stocks saw buying interest. Shares of BEL and Data Patterns rose by around 2%. Some metal stocks later recovered and were seen trading in the green.
