Stock market crashed: After the announcement of Budget 2026, the expectations of investors in the stock market were dashed. Some decisions of the Union Budget 2026-27 presented by Finance Minister Nirmala Sitharaman created immense uneasiness in the market. In particular, the announcement of tax increase on futures and options trading jolted investor sentiment. Due to this, Sensex witnessed a sudden fall of 2300 points and Nifty also closed 700 points lower as compared to the previous session.
Three big reasons for market decline
- Increase in tax on F&O: The government has increased the tax rates on futures and options trading. Recent SEBI reports have repeatedly warned that more than 90% of retail traders are losing money in F&O. To discourage this, the government has taken the help of tax.
- fear of capital gains: Investors were hoping that there would be relief in Long Term Capital Gains (LTCG), but the disappointment increased due to the absence of any major relaxation on this front in the budget.
- Fiscal deficit and bond yields: Fiscal deficit data and surge in bond yields put pressure on banking stocks, leading to Nifty Bank also falling badly.
Market condition: all-round selling
Sensex and Nifty started diving right in the middle of the budget speech. The Sensex fell by 2300 points and slipped below the 80,000 level, while the Nifty 50 also fell by more than 700 points. Within a few minutes, investors’ property worth lakhs of crores was wiped out. Shares of banking, IT and realty sectors were hit the most.
Expert opinion
Market experts believe that increasing taxes may reduce liquidity in the market. There will be market instability in the short term. However, the government argues that this will attract investors towards long-term safe investments rather than ‘gaming’.
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