India: Daily Stock Market Performance Insight - February 2, 2026

The Indian equity markets faced a turbulent session as the Sensex plunged 1,547 points (1.88%) to settle at 80,723, while the Nifty50 dropped 495 points (1.96%) to close at 24,825. This downturn followed a massive intraday swing where the Sensex at one point crashed 2,827 points before seeing a brief, knee-jerk recovery. Investor sentiment was primarily rattled by the Union Budget's hike in Securities Transaction Tax (STT), with futures rates jumping 150% to 0.05% and options rates rising 50% to 0.15%, which analysts expect could reduce trading volumes by 5%.

The STT revision triggered a sharp sell-off in exchange and brokerage stocks. BSE closed 8% lower after a 15% intraday drop, while Angel One and Groww fell 9% and 6% respectively. Market caution was further reflected in institutional activity, as Foreign Institutional Investors (FIIs) sold shares worth 588 crore and Domestic Institutional Investors (DIIs) sold 683 crore. Volatility spiked significantly, with the India VIX rising 12.9% to 15.10 and the Nifty Put-Call Ratio (PCR) slipping from 0.90 to 0.59, indicating increased hedging through call shorts and put longs by FIIs.

Despite the broader gloom, corporate earnings and policy shifts provided pockets of strength. BPCL reported a massive 89% jump in net profit to 7,188.4 crore, while Sun Pharma grew profit by 16% to 3,369 crore. Conversely, Tata Chemicals posted a net loss of 53 crore against a previous profit of 158 crore. Sector-specific momentum was seen in data center stocks like Netweb Technologies, which rallied 7% following a tax holiday extension until 2047. Investors should now watch for opportunities in capex-heavy sectors benefiting from the government's 12.2 lakh crore budget allocation, while remaining wary of the high volatility and reduced liquidity in the derivatives segment.