Budget 2026: Sensex, Nifty Open on Sunday for Key Announcements

A Rare Sunday Session for Union Budget 2026

In an unusual move, India's benchmark equity indices, the BSE Sensex and NSE Nifty, commenced trading on Sunday, February 1, 2026. This special session was arranged to coincide with Finance Minister Nirmala Sitharaman's presentation of the Union Budget for the upcoming fiscal year. This marks the ninth consecutive budget presented by Sitharaman, occurring at a time when the Indian economy is recognized as one of the world's fastest-growing major economies. The decision ensures that market participants can react in real-time to announcements concerning government spending, taxation, and economic growth projections.

Both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) confirmed the live trading session, adhering to standard market timings from 9:15 am to 3:30 pm. An NSE circular stated, "On account of the presentation of the Union Budget, members are requested to note that Exchange shall be conducting a live trading session on February 01, 2026." This arrangement provided a unique opportunity for investors to immediately factor in the fiscal policy roadmap for the year ahead.

Pre-Budget Market Jitters

Investor sentiment was cautious in the run-up to the budget presentation. After a three-day rally, the markets witnessed a notable drop during early trade on Friday, January 30. The 30-share BSE Sensex declined by 619.06 points to 81,947.31, while the 50-share NSE Nifty fell 171.35 points to 25,247.55. This downturn reflected pre-budget nervousness as traders and investors positioned themselves for potential policy surprises and adjusted their portfolios in anticipation of the fiscal announcements.

Key Sectoral Expectations

Market participants had specific expectations across several key sectors, which were in sharp focus ahead of the Finance Minister's speech.

Infrastructure and Railways: A significant push in capital expenditure (capex) was widely anticipated, with a continued emphasis on the PM Gati Shakti scheme and the expansion of Dedicated Freight Corridors. Analysts projected a 10–12% increase in the capital outlay for railways, focusing on track expansion and enhancing regional connectivity. Stocks like Larsen & Toubro, KEC International, RVNL, and IRCON were on the watchlist.

Defence: The 'Atmanirbhar Bharat' or Self-Reliant India initiative was expected to be a central theme. Market analysts anticipated a substantial 15% increase in defence capex. Key expectations included the expansion of indigenization lists and greater R&D funding for advanced technologies such as drones, AI, and cyber warfare. Defence-related stocks like Bharat Electronics (BEL), Hindustan Aeronautics Ltd (HAL), and Mazagon Dock were in the spotlight.

Automotive and Electric Vehicles: The auto industry was looking for significant policy support. Key demands included GST rationalization, particularly a uniform 5% rate on all EV components, and an extension of the Production-Linked Incentive (PLI) scheme for advanced chemistry cells. Targeted subsidies for electric two-wheelers and incentives for charging infrastructure were also expected. Key stocks included Tata Motors, Mahindra & Mahindra, Bajaj Auto, and Amara Raja Energy & Mobility.

Overall Market Sentiment and Technical Outlook

The broader market sentiment indicated a focus on transitioning from subsidy-led growth towards self-reliance in infrastructure and manufacturing. With a projected fiscal deficit target of 4.2% of GDP, the budget was expected to strike a balance between fiscal prudence and growth initiatives. Technical analysts outlined key levels for traders to monitor.

Analysts suggested that as long as the Nifty trades above the 25,200 mark, a positive sentiment is likely to persist. However, a drop below this level could increase weakness. For Bank Nifty, the 60,000-60,100 zone was identified as a crucial resistance area.

Special Trading Restrictions

Certain restrictions were in place for the special Sunday session as it was technically a settlement holiday. Same-day (T+0) settlement was not available. Consequently, stocks purchased on Friday could not be sold during the Sunday session. Similarly, any profits or proceeds from Friday's sales were not available for trading and were scheduled to be credited on Monday. This required traders to manage their liquidity and positions accordingly.

Institutional Investor Activity

Institutional activity on the preceding Friday provided some insight into market positioning. Provisional data from the NSE showed that Foreign Portfolio Investors (FPIs) were net buyers, purchasing domestic stocks worth Rs 2,251.37 crore. In contrast, Domestic Institutional Investors (DIIs) were net sellers, offloading equities worth Rs 601.03 crore. This divergence highlighted differing strategies among major market players ahead of the key fiscal event.

Conclusion

As the Finance Minister began her speech, the market was poised for a volatile session. Investors and analysts were keenly focused on the government's fiscal consolidation path, capital expenditure allocations, and any sector-specific incentives. The announcements made during the Union Budget 2026 are expected to set the tone for the Indian stock market's trajectory in the coming fiscal year, influencing investment decisions across all sectors.