Rs 10 Lakh Crore Wiped Out As Sensex Falls 1,500 Points On Budget Day

Indian markets crashed about 2 per cent today as Finance Minister Nirmala Sitharaman's Budget proposal to hike transaction tax on stocks spooked investors. The crash wiped out nearly Rs 10 lakh crore of investor wealth.

The 30-pack BSE Sensex ended below 80,000, diving 1,546.84 points (1.88%), in a market gripped by extreme volatility. NSE's Nifty50 settled below 25,000, losing 495 points (1.96%), with both indices marking their worst budget day in six years.

On the BSE, a total of 2,375 stocks declined while 1,759 posted gains, and 175 remained unchanged. State Bank of India, Bharat Electronics, ITC, Tata Steel, UltraTech Cement, and Reliance Industries were among the major laggards in the Sensex pack, while TCS, Infosys, and Sun Pharma were among the few gainers. 

Check the Budget live updates here

The crash followed a proposal by Sitharaman to hike the Securities Transaction Tax (STT) in the futures and options (F&O) segment. The STT on future contracts would be raised to 0.05% from 0.02% and that on options will be increased to 0.15%, as per the proposal that dampened investor sentiments.

The Indian stock exchanges were open on Sunday in view of the budget presentation. Debt and foreign exchange markets were shut.

Read: Why Markets Are In Red After Nirmala Sitharaman's Budget Speech

'STT Hike A Dampener'

Experts attributed the market dip to the STT hike in the F&O segment, calling it a dampener in the short term. 

Pranav Haridasan of Axis Securities pointed out that the STT hike follows an increase in capital gains taxes last year, raising the overall transaction costs for investors.

Futures being a margined product, the STT hike raises questions over whether it will deliver the desired outcomes or weigh on liquidity and market cost competitiveness, he said, noting that traders reflected the concerns in the immediate market reaction.

Aakash Shah of Choice Equity Broking said the STT hike in the F&O segment will possibly act as a marginal negative for foreign portfolio investor (FPI) flows in the near term.

Read: People Losing Hard-Earned Money: Sources On Hiked Securities Transaction Tax

The hike may work well in the long term, but it's a dampener in the short term, according to HDFC Securities' Dhiraj Relli.

Since the last budget, Nifty50 has gone up just 7.8%, underperforming in comparison with its Asian peers as record foreign outflows and muted corporate earnings hit investor sentiments. However, policy measures like GST cuts and interest rate cuts since the last budget have improved earnings and consumption demand.

The Economic Survey, released on Thursday, projects India's GDP growth in the ongoing financial year at 7.4% and between 6.8% and 7.2% in the next financial year (2026-27).