The Indian stock market is bracing for action today, February 1, 2026, as Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026 in the Lok Sabha. This will be her ninth consecutive budget speech under the leadership of Prime Minister Narendra Modi.
The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are open for a special trading session today to accommodate the Budget presentation. The NSE has specified that the pre-open market will run from 9:00 am to 9:08 am, followed by normal trading hours from 9:15 am to 3:30 pm. The BSE has issued a similar notice, declaring the day a "special trading day" with regular market hours.
Market participants will be closely watching key policy announcements in the Budget 2026, with expectations of policy continuity. Investors will be looking for signals on how the government intends to support economic growth and revive capital expenditure (capex), while preserving fiscal discipline amid heightened geopolitical and macroeconomic uncertainty. According to the Economic Survey 2026, India's economy is projected to grow 7.4 per cent in financial year 2026 (FY26) and 6.8-7.2 per cent in FY27, driven by regulatory reforms, a strong macroeconomic base, and a renewed call for private sector investment.
The stock market is expected to remain volatile today. While the market has low expectations from the Budget 2026, any positive surprise could trigger a rally in the Indian benchmark indices, Nifty 50 and Sensex. High-growth sectors where government capex and policy shifts are expected may also remain volatile. Key sectors to watch include Defense, Infra, Agriculture, Power, and Railways, which often benefit from budgetary allocations, as well as Financials and Housing, which are sensitive to tax incentives and interest rate commentary.
Historically, market reactions on Budget Day have been mixed and unpredictable. Markets tend to respond positively when the Budget focuses on growth, infrastructure spending, and tax stability. For example, in 2017, the Sensex rose around 1.7%, while the Nifty gained close to 1.8% after Finance Minister Arun Jaitley avoided major tax hikes and provided relief to the middle class. Another standout year was 2021, when Finance Minister Nirmala Sitharaman presented the Budget in the aftermath of the COVID-19 pandemic, with a focus on economic recovery, higher capital expenditure, healthcare, and infrastructure; the Sensex surged over 2%, while the Nifty rose nearly 2.7%. However, not all Budgets have been market-friendly. In 2016, the announcement of higher dividend taxation disappointed investors, and in 2018, the introduction of long term capital gains tax in listed equities and equity mutual fund took markets by surprise.
