Why Union Budget 2026 triggered worst budget-day market drop in 6 years
The Union Budget 2026, announced on February 1, triggered the worst budget-day stock market drop in six years—Sensex fell nearly 1,547 points to 80,722.94 and Nifty plunged over 495 points (about 2%) to 24,825.45.
If you're wondering why everyone's talking about it, here's what actually happened.
Foreign investors have dumped more than $3 billion since the start of 2026
A big reason is that foreign investors have dumped more than $3 billion since the start of 2026, which dragged the Nifty down even more.
The government also raised taxes on futures and options trades (STT), making trading costlier and less appealing.
Plus, a huge ₹17.2 trillion borrowing plan pushed up bond yields—bad news for companies that rely on loans.
Short-term investors disappointed by long-game approach
Investors were hoping for relief on capital gains tax or incentives to attract foreign money—but got neither.
Instead, the focus shifted to helping MSMEs hit by US tariffs and boosting long-term spending in sectors like biopharma.
This long-game approach left many short-term investors disappointed and led to a sharp sell-off.