Budget 2026: Indian Markets Open for Rare Sunday Trading

A Rare Weekend Session for the Union Budget

In a notable departure from the standard schedule, Indian stock markets will conduct a full live trading session on Sunday, February 1, 2026. The special session coincides with the presentation of the Union Budget 2026 by Finance Minister Nirmala Sitharaman. This arrangement by the National Stock Exchange (NSE) and BSE Limited allows investors and traders to react in real time to the fiscal policy announcements, making it only the second time in India's post-independence history that equity markets have operated on a Sunday.

This will be Finance Minister Sitharaman's ninth consecutive budget presentation and the third full budget of the current government. The decision to keep markets open underscores the significance of the event, providing an immediate platform for price discovery as the government outlines its economic roadmap for the next fiscal year.

Market Timings and Exchange Operations

Both the NSE and BSE will adhere to their standard weekday trading hours to ensure normalcy and liquidity. The commodity exchanges, including the Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX), will also be operational, allowing for simultaneous reactions in equity and commodity markets. This synchronized operation across major exchanges is designed to provide a comprehensive market response to the budget's details.

Here is a summary of the trading hours for the day:

Market Sentiment Entering Budget Day

The market enters this special session with a sense of caution. January 2026 proved to be a difficult month for Indian equities, with benchmark indices witnessing significant declines. The Sensex fell by nearly 2,919 points, or 3.43%, while the Nifty 50 dropped by approximately 826 points, or 3.2%. This shaky start to the year has been attributed to several factors, including persistent outflows from Foreign Institutional Investors (FIIs), a weakening rupee hovering near 92 against the US dollar, and uncertainty surrounding global trade policies.

Prashanth Tapse, Senior VP of Research at Mehta Equities, noted that caution has dominated Dalal Street due to these lingering risks. However, steady buying from Domestic Institutional Investors (DIIs) has provided a crucial cushion, preventing a steeper fall and helping the market hold key support levels.

What Analysts Expect from Budget 2026

Market expectations from the Budget are largely modest, with a focus on stability and continuity rather than dramatic reforms. Analysts believe the government will perform a careful balancing act, aiming to maintain fiscal discipline while supporting economic growth. A key figure being watched is the fiscal deficit target for FY27, which is anticipated to be around 4.3-4.4% of GDP.

There is a strong expectation for a continued push in capital expenditure, with a projected outlay near ₹12.5 trillion. Key focus areas are likely to be defence, railways, and shipbuilding. Investors are also hoping for the status quo on capital gains tax, as any adverse changes could negatively impact equity market sentiment. Structurally, themes like nuclear power, with NTPC in focus, and data centers, benefiting companies like Bharti Airtel, Adani Enterprises, and Tata Communications, are on the radar.

Technical Levels for Nifty and Sensex

Traders will be closely watching key technical levels as the market reacts to the budget speech. Volatility is expected to be high, with the potential for sharp moves in either direction.

According to technical analysts, the following levels are critical:

Vaishali Parekh, Vice President of Technical Research at PL Capital Group, noted that the Sensex has faced resistance near its 200-day moving average (DMA) of 82,500. For the Nifty, sustaining above the 200-period MA at the 25,200 zone is crucial for maintaining a stable outlook.

Historical Perspective on Budget Day Volatility

While Budget Day is often associated with high drama, historical data suggests that market reactions are not always as extreme as anticipated. Over the past 15 years, the Nifty's average movement on Budget Day has been a mere 0.19%. This indicates that markets often take time to digest policy announcements fully, with the true impact unfolding over subsequent trading sessions rather than in a single day's sharp reaction. This year, with expectations already subdued, a budget with no negative surprises could be sufficient to stabilize market sentiment.

Conclusion

The special Sunday trading session for Union Budget 2026 is a significant event, offering a live gauge of investor confidence in the government's fiscal strategy. While the market backdrop is cautious, the focus remains on long-term policy direction, particularly regarding capital expenditure and fiscal consolidation. Investors will be watching to see if the budget can restore confidence and keep India's growth narrative intact amidst an uncertain global environment. The market's immediate reaction will set the tone for the week, but the budget's lasting impact will be determined in the weeks and months to come.