Decoding Today's Share Market Surge: Analyzing the Forces Driving the Sensex and Nifty Rally on February 2nd.
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On February 2, 2026, the Indian stock market experienced a rebound, with both the Sensex and Nifty showing signs of recovery after a significant downturn on Budget day. Early trading saw the 30-share BSE Sensex climb 302 points to reach 81,024.94, while the 50-share NSE Nifty rose by 59.25 points to 24,884.70. This recovery was largely attributed to value buying in blue-chip companies.

Several factors contributed to this market movement. After the presentation of the Union Budget 2026-27 on Sunday, February 1, the markets initially reacted negatively. The Finance Minister's proposals, including a hike in the securities transaction tax (STT) on equity derivatives, had rattled investors, leading to a nearly 2% plunge in key indices during the special Budget-day trading session. This decline marked the biggest budget-day percentage drop in six years.

However, the initial negative sentiment began to subside as investors assessed the long-term implications of the budget. Nirmala Sitharaman announced measures aimed at boosting manufacturing, offered tax incentives for global data centers, and provided support for agriculture and tourism. These measures were seen as a long-term blueprint for sustaining growth amidst rising global risks.

Several sectors experienced notable gains, contributing to the overall market rise. Investor interest surged in real estate following budget proposals focused on strengthening infrastructure in Tier-II and Tier-III cities. The Nifty Oil and Gas sector also saw gains. Stocks such as Adani Ports, Larsen & Toubro, Asian Paints, Bharat Electronics, Reliance Industries, Power Grid, and HDFC Bank were among the major gainers. Conversely, Trent, Titan, ITC, and Hindustan Unilever were among the laggards.

Despite the overall positive trend, certain sectors faced challenges. The Nifty PSU Bank index experienced a correction due to the government's announcement of a substantial market borrowing plan of ₹17.2 lakh crore for FY27. The Nifty IT sector remained under pressure despite the government's push for AI and IT services.

Global cues also played a role in influencing market sentiment. Asian markets displayed mixed trends, with South Korea's Kospi tumbling, while Japan's Nikkei 225, Shanghai's SSE Composite index, and Hong Kong's Hang Seng index also traded lower. U.S. markets had ended lower on Friday, adding to the cautious sentiment.

Analysts suggest that investors should focus on quality businesses with earnings visibility during these volatile phases. Systematic investing and staggered buying are recommended over emotional trades, and derivative traders are advised to respect stop losses.

Overall, the Indian stock market demonstrated resilience on February 2, 2026, recovering from the Budget day shock. While the increase in STT on derivatives may have a short-term impact on trading volumes and price discovery, experts remain optimistic about the medium-term outlook, expecting high-teen returns driven by earnings recovery.

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