The Indian stock market trades on a rare Sunday session today as investors respond to the Union Budget 2026 presented by the Finance Minister. This unusual trading day brings intense attention from traders, institutions, and retail investors alike. The market opens with mixed signals, reflecting a balance between policy optimism and global economic uncertainty.
Benchmark indices show mild gains in early trade. The Sensex moves up by nearly 200 points in the opening hour, while the Nifty 50 trades above the 25,350 level. However, market participants avoid aggressive positions and choose a wait-and-watch approach as they listen closely to the Budget speech and analyze policy announcements in real time.
Market Opens with Caution and Volatility
The market begins the session with low volumes and high volatility. Traders remain careful as they digest fiscal measures related to taxation, infrastructure spending, and economic growth. Many investors expect policy clarity but fear negative surprises in corporate taxation and sector-specific levies.
Mid-cap and small-cap stocks trade under pressure. These segments show weaker breadth compared to frontline indices, signaling risk aversion among investors. Banking and IT stocks provide limited support to the benchmarks, while metals and commodity-related shares pull the market lower.
Volatility increases sharply as the Budget speech progresses. Options traders record higher premiums due to uncertainty, and intraday swings become frequent. The India VIX index rises, indicating heightened fear and speculation among market participants.
Precious Metals and Commodity Stocks Face Sharp Decline
One of the most dominant themes of the day emerges from the commodities space. Gold and silver prices fall steeply during the session, triggering panic selling in metal-linked stocks. Shares of commodity exchanges and bullion-related companies witness heavy losses.
Multi Commodity Exchange (MCX) stock crashes nearly 15 percent and hits the lower circuit as traders exit positions aggressively. The fall in precious metals stems from global expectations of tighter monetary policies and reduced demand for safe-haven assets.
Base metal stocks also struggle. Tata Steel, JSW Steel, and Hindalco trade lower as global metal prices weaken. Concerns over slowing demand from China and fears of higher interest rates in developed markets hurt investor sentiment toward metal producers.
FMCG and Consumer Stocks Under Pressure
Fast-moving consumer goods stocks remain weak throughout the session. ITC continues to attract selling pressure after recent tax-related concerns on tobacco products. The stock erases nearly ₹1 lakh crore in market capitalization over the past few sessions and remains a major drag on benchmark indices.
Other FMCG stocks such as Hindustan Unilever and Nestlé India trade sideways, as investors wait for clarity on consumption-focused incentives and inflation control measures in the Budget. Rising input costs and tax uncertainties limit upside in this sector.
Consumer discretionary stocks also show mixed performance. Auto stocks hold steady due to strong monthly sales data, but rising fuel prices and higher borrowing costs prevent sharp rallies.
Infrastructure and Railway Stocks Gain Attention
In contrast to weak commodity and FMCG stocks, infrastructure and railway-related stocks attract buying interest. The Budget emphasizes capital expenditure, railway modernization, and public infrastructure projects. This policy direction boosts sentiment in companies linked to engineering, construction, and logistics.
Railway equipment manufacturers and PSU infrastructure firms trade higher as investors expect long-term benefits from increased government spending. Stocks related to cement, power transmission, and road construction show selective strength.
Market participants view infrastructure as a defensive growth theme amid global uncertainties. Analysts believe government spending on railways and transport creates employment and strengthens domestic demand, which supports long-term equity valuations.
Banking and Financial Stocks Show Stability
Banking stocks trade with moderate gains and provide stability to the broader market. Private sector banks such as HDFC Bank and ICICI Bank remain resilient due to strong balance sheets and consistent credit growth. Public sector banks trade mixed as investors evaluate fiscal support and recapitalization plans.
NBFC stocks display cautious optimism as traders assess interest rate outlook and liquidity conditions. The Budget’s focus on financial inclusion and credit access encourages long-term confidence but does not trigger immediate rallies.
Insurance and asset management companies witness mild buying as investors anticipate reforms and regulatory clarity in the financial services space.
Broader Market Shows Weak Breadth
Despite modest gains in benchmark indices, market breadth remains negative. More stocks decline than advance on both NSE and BSE. Small-cap stocks suffer heavier selling pressure as investors reduce exposure to high-risk assets.
This divergence highlights the fragile nature of the rally. Traders concentrate on large-cap defensive stocks while avoiding speculative counters. Portfolio rebalancing dominates trading behavior throughout the session.
Foreign institutional investors remain cautious and avoid heavy buying. Global factors such as rising oil prices, weak Asian markets, and currency volatility influence their strategy. The Indian rupee remains under pressure, adding to import cost concerns and inflation risks.
Macroeconomic Factors Shape Market Mood
Several macroeconomic elements influence today’s trading:
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Rising crude oil prices increase fears of inflation and fiscal pressure.
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The rupee trades weak against the US dollar, affecting foreign fund flows.
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Global central banks signal tighter monetary policies, reducing appetite for emerging market equities.
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Slowing global growth adds uncertainty to export-driven sectors such as IT and metals.
At the same time, positive domestic data such as stable GST collections and improving industrial output provide some comfort to investors. These mixed signals create a tug-of-war between optimism and caution.
Investor Strategy and Trading Behavior
Market experts advise traders to avoid impulsive decisions on Budget Day. They emphasize disciplined risk management and long-term perspective. Derivative traders face high volatility and wide price swings, which demand strict stop-loss strategies.
Long-term investors focus on sectoral allocation rather than short-term index movement. Financials, infrastructure, healthcare, and selective technology stocks attract interest due to strong fundamentals and policy support.
Retail investors stay highly active, especially in intraday and options trading, but advisors warn against emotional trading during major policy events.
Outlook for Coming Sessions
The market’s reaction on February 1, 2026 sets the tone for the coming weeks. Investors will analyze Budget provisions in detail over the next few sessions. Sector-specific announcements on taxation, subsidies, and capital expenditure will drive stock-specific movements.
Analysts expect continued volatility in the short term but see potential for recovery if policy measures support growth and control fiscal deficits. Historical trends suggest that markets often stabilize after initial Budget-day fluctuations once clarity emerges.
Infrastructure, banking, and manufacturing sectors may outperform if government spending accelerates. Metals and commodities may remain under pressure due to global headwinds. FMCG stocks may recover only after clarity on tax structure and consumption incentives.
Conclusion
The Indian stock market on February 1, 2026 reflects a classic Budget Day scenario marked by cautious optimism, sectoral divergence, and heightened volatility. While benchmark indices show mild gains, underlying weakness in metals, FMCG, and small-cap stocks signals investor nervousness.
Infrastructure and financial stocks provide pockets of strength, driven by expectations of policy-driven growth. Commodity-linked stocks suffer from global price corrections and risk-off sentiment. The broader market remains fragile, with investors choosing safety over speculation.
This rare Sunday trading session underscores the importance of fiscal policy in shaping market direction. As traders absorb Budget details in the coming days, the market prepares for sharper moves driven by earnings, global cues, and economic reforms.
The session of February 1, 2026 stands as a critical turning point for Indian equities, where caution dominates emotion and strategy overrides speculation.
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