Indian markets opened lower on February 2, 2026, with Sensex down 0.21% and Nifty 50 down 0.12%, extending the sharp sell-off from the Budget 2026 special session amid negative investor reaction to STT hike.
Retail sentiment remains fragile with FII and DII net selling totaling ₹1,271 crore, India VIX surging 12.9% to 15.10, and Nifty PCR dropping to 0.59 indicating heightened caution.
Nifty holds volatile trade above 25,050 after dropping to lows near 24,571 on February 1, with Sensex closing at 80,722 following a 1,547-point or 1.88% decline post-Budget announcements.
Prevailing bearish mood driven by Budget 2026 measures like STT increase on F&O to 0.05%, persistent institutional outflows, and Nifty breaking key swing low of 24,919 signaling weakness.
Overall market commentary points to continued pressure with GIFT Nifty signaling steady but cautious open around 24,861, Bank Nifty near 100-DMA support, and bounces being sold into.
Key Indices
NIFTY 50
25,088
1.06%
SENSEX
81,666.46
-0.73%
Momentum Snapshot
Index
Price
1D
1M
1Y
Sensex
81,666.46
-0.73%
-4.42%
5.80%
Nifty Next 50
67,073
1.07%
-4.75%
5.62%
Nifty 50
25,088
1.06%
-4.71%
6.84%
Nifty Midcap 100
57,668
0.96%
-6.03%
7.82%
Nifty Smallcap 250
15,507
0.56%
-7.67%
-2.81%
Market Sentiment
MMI Score
21.72
Extreme Fear
MMI is in the extreme fear zone. Extreme fear (<30) suggests a good time to open fresh positions , as markets are likely to be oversold and might turn upwards.
Since last week: Sentiment moved from Ext. Fear (10.00) to Ext. Fear (21.72).
Sector Highlights
CPSE
+2.26%
Gains driven by record capex announcement in Union Budget 2026-27 boosting infrastructure-related PSUs; Power Grid shares jumped 8% after raising FY26 capex guidance to Rs 32,000 crore.
Auto
+2.13%
Rise supported by selective buying post-budget selloff and positive spotlight on Hero MotoCorp due to Budget-related announcements.
PSE
+2.04%
Upward movement from Budget's record capex positively impacting PSUs; L&T shares rose 3% on infrastructure spending boost, with Nifty Capital Market index up 2.89%.
Pharma
+0.07%
Minimal change amid broader market recovery from STT hike selloff in Union Budget, with no sector-specific news or drivers reported.
IT
-0.47%
Decline due to ongoing caution from STT increase on derivatives in Budget 2026-27, raising trading costs and pressuring F&O-heavy sectors amid net FII and DII selling.
Sector Scoreboard
Sector
1D
1W
1Y
3Y
CPSE
+2.26%
+2.31%
+9.90%
+136.05%
Auto
+2.13%
-2.29%
+12.38%
+98.31%
PSE
+2.04%
+2.43%
+9.48%
+128.30%
Pharma
+0.07%
-0.86%
+0.94%
+74.29%
IT
-0.47%
+0.04%
-8.99%
+27.43%
Stock Spotlight Of The Day
Power Grid Corporation of India Limited
Market Cap
2,51,556 Cr
Current Price
₹270
Stock P/E
16.2
Dividend Yield
3.33%
ROCE
12.8%
ROE
17.0%
Shareholding Changes (Impact Factors)
FIIs
QoQ
-0.93%
YoY
-3.38%
Stable foreign holding
DIIs
QoQ
0.86%
YoY
3.2%
Stable domestic holding
Promoters
QoQ
0%
YoY
0%
No change in promoter holding
Quarterly Summary (Absolute)
Sales
QoQ
Mild rise
8.01%
YoY
Solid pickup
10.34%
Expenses
QoQ
Sharp cut
-26.15%
YoY
Mild increase
5.18%
Operating Profit
QoQ
Healthy pickup
17.14%
YoY
Healthy pickup
11.27%
Net Profit
QoQ
Healthy growth
17.36%
YoY
Mild gains
8.36%
Profit & Loss (Compounded)
Sales Growth
10 Years
10%
5 Years
4%
3 Years
3%
TTM
4%
Profit Growth
10 Years
12%
5 Years
9%
3 Years
3%
TTM
0%
Stock Price CAGR
10 Years
13%
5 Years
18%
3 Years
19%
1 Year
-7%
Return on Equity
10 Years
17%
5 Years
18%
3 Years
18%
Last Year
17%
Fundamentals Corner
The company remains a high-efficiency cash cow with a consistent 17% ROE, yet its structural profit growth has decayed from 12% over a decade to a stagnant 0% TTM. A sharp double-digit surge in recent quarterly operating profits suggests a short-term turnaround that contradicts the lackluster three-year trajectory.
At a modest 16.2 P/E and a high 3.33% dividend yield, the valuation reflects a 'value trap' sentiment that ignores the recent recovery in sales and margin agility. Investors should monitor if this quarterly spark can permanently reverse the long-term trend of decelerating momentum.
News TidBits
Power Grid rose 7.58% to lead the Nifty gainers today, driven by the announcement of an increased FY26 capital expenditure guidance of ₹32,000 crore.
This enhanced capex signal provides high execution visibility in the power transmission sector and reinforces the company's role in India's expanding digital and industrial infrastructure.
The stock is benefiting from a flight to safety, as investors seek out defensive PSU majors with stable cash flows amid the volatility triggered by new derivative tax rules.
Analytical sentiment remains bullish on the stock due to the long-term indigenization tailwinds and the company's consistent ability to track nominal GDP growth.
Despite broader market pressures, Power Grid's strategic position in the energy transition theme makes it a primary beneficiary of the Budget’s infrastructure-led growth roadmap.
Stacks on Stacks: Tip Time 🤑
In a post-budget environment, the most expensive 'tax' a retail investor can pay is the emotional cost of reacting to short-term policy shocks rather than long-term business fundamentals.
Metals Market
Commodity
Price
Day
Monthly
YoY
Gold
USD/t.oz
4761.64
-2.57%
7.09%
69.23%
Silver
USD/t.oz
83.282
-1.6%
8.76%
164.45%
Copper
USD/Lbs
5.87
-0.91%
-1.77%
36.07%
Steel
CNY/T
3071
-1.32%
0.1%
-5.74%
Lithium
CNY/T
160500
-4.46%
35.44%
106.7%
Iron Ore CNY
CNY/T
788
-0.32%
-0.76%
-2.11%
Platinum
USD/t.oz
2093.2
-1.23%
-8.51%
111.05%
HRC Steel
USD/T
970.06
-0.2%
3.97%
30.74%
Iron Ore
USD/T
105.62
-0.14%
-1.41%
3.97%
Silicon
CNY/T
8720
-1.3%
-0.63%
-19.52%
Scrap Steel
USD/T
378
0.67%
3.42%
5.15%
Titanium
CNY/KG
45.5
0%
-1.09%
0%
Precious metals have entered a phase of extreme volatility, with gold hovering near $4,900 after experiencing its biggest plunge in a decade, while silver saw a massive 37% intraday drop following CME margin hikes.
Industrial metals like copper are under pressure, with LME prices falling 3.8% due to global demand concerns and a strengthening U.S. Dollar, directly impacting margins for domestic primary producers like Hindustan Copper.
A significant regulatory shift in Sovereign Gold Bonds (SGBs) has removed capital gains tax exemptions for secondary market purchases, triggering a sell-off as tax-free status is now restricted to original subscribers.
Despite short-term price fluctuations, the metal sector remains a focal point for investors as the Ministry of Steel accelerated new infrastructure projects expected to drive double-digit demand growth through the fiscal year.
The Nifty fell approximately 2% on Budget Day, plunging to its September swing low of 24,587 following the substantial increase in STT on futures and options.
India VIX jumped 12.9% to 15.10, while the Put-Call Ratio slipped to 0.59, signaling heightened institutional fear and defensive positioning.
Exchanges and brokers like BSE and Angel One face direct earnings risk from expected declines in high-frequency trading and retail derivative volumes.
The move aims to curb speculative activity but risks compressing market depth and increasing execution costs for all participants.
Returning from the Sunday holiday, FIIs aggressively added put longs and call shorts, indicating a lack of conviction in current market valuations.
The Indian Rupee is approaching the 92 mark, forcing aggressive RBI intervention to defend against global risk-off sentiment and capital outflows.
FIIs net sold over ₹41,000 crore in January, driven by India's valuation premium and the absence of fresh 'big-bang' reforms in the recent Budget.
The 'vicious cycle' of FII outflows and currency weakness remains a primary headwind for large-cap sectors like IT and Banking.
Bank Nifty Technical Breakdown Amid Record Government Borrowing
Bank Nifty closed below the critical 58,500 mark, with the 58,000 level (100-day moving average) now acting as a vital 'line in the sand' for technical traders.
The government's ₹17.2 lakh crore gross borrowing plan has pushed 10-year yields to 6.78%, threatening bank treasury books and net interest margins.
A divergence is emerging where PSU banks like SBI show better resilience than private peers due to their exposure to government infrastructure spending.
Continued pressure on the 58,000 level could drag the banking index toward 57,000, signaling a broader credit growth slowdown.
FII / DII Snapshot
Yesterday
FII Net: ₹-588.34 cr
DII Net: ₹-682.73 cr
January 2026
FII Net: ₹-41435.22 cr
DII Net: ₹69220.74 cr
Daily Flows
Date
FII Net
DII Net
01-Feb-2026
₹-588.34 cr
₹-682.73 cr
Monthly Flows
Month
FII Net
DII Net
January 2026
₹-41435.22 cr
₹69220.74 cr
December 2025
₹-34349.62 cr
₹79619.91 cr
November 2025
₹-17500.31 cr
₹77083.78 cr
October 2025
₹-2346.89 cr
₹52794.02 cr
September 2025
₹-35301.36 cr
₹65343.59 cr
August 2025
₹-46902.92 cr
₹94828.55 cr
Cha-Ching Cheatsheet 💵
True diversification is not about owning many stocks, but about ensuring your portfolio is not solely dependent on a single regulatory outcome or a specific liquidity regime.
Global markets ended cautiously with US indices lower: S&P 500 down 0.43%, Nasdaq 0.94%, Dow 0.36%, influencing mixed Asian cues ahead of China factory data.
Asian markets mixed in early trade: Japan’s Nikkei up 0.75%, Mainland China’s CSI 300 flat at +0.01%, but Hong Kong Hang Seng down 1.34% and South Korea KOSPI -2.63%.
Weak global cues from US Wall Street choppy finish and yen weakening add to fragile sentiment, with gold extending losses amid broader risk-off tone.
Investors digest mixed FII data and tariff imposition on Canadian aircraft imports, contributing to Indian market's cautious opening post-Budget rout.
Global caution persists with US indices defensive ahead of Fed pick Kevin Warsh, private China activity data awaited, impacting emerging markets like India.
Emerging Opportunities
Defensive sectors like tobacco stocks (ITC, Godfrey Phillips) promising medium-term as higher excise duties from Budget 2026 may boost pricing power and margins.
PSU defence plays (BEL, HAL) in focus post-Q3 results and Budget allocations, offering contrarian growth potential amid geopolitical tensions.
Areas near key supports like Nifty 24,500-24,300 or Bank Nifty 100-DMA present contrarian bottom-fishing opportunities if reversal patterns emerge.
Real estate/infra (Anant Raj) highlighted for policy support in Budget 2026, positioning for long-term urban development growth.
Renewables (Adani Green) gaining traction from budget incentives and energy transition push, with medium-term upside despite short-term volatility.
Policy & Regulations
The Union Budget 2026 implemented a sharp hike in Securities Transaction Tax (STT) on futures and options trades to 0.05%, a move intended to curb retail speculation that has immediately pressured market liquidity.
New proposals aim to eliminate tax deductions for interest on borrowed funds used to invest in dividend-paying stocks, likely discouraging leveraged investment strategies used by High Net-worth Individuals.
The Finance Bill 2026 has classified stockbroking services for Foreign Portfolio Investors (FPIs) as 'zero-rated exports,' effectively reducing the GST burden for Indian brokers serving overseas institutional clients.
A transformative 100% tax holiday until 2047 has been granted to data center infrastructure, positioning India as a global AI hub and providing a long-term fiscal tailwind for specialized tech and electrical firms.
The cigarette industry, led by ITC and Godfrey Phillips, faces immediate volume and margin pressure following a steep excise duty hike that has increased retail prices by approximately ₹22-25 per pack.
Crypto Buzz
Name
Price
Market Cap
24h Change
ATH Change
Bitcoin (BTC)
$77876
$1.55T
-0.79%
-38.23%
Ethereum (ETH)
$2294.64
$275.31B
-4.54%
-53.61%
Tether (USDT)
$0.999065
$185.19B
-0.01%
-24.49%
BNB (BNB)
$765.34
$104.01B
-0.58%
-44.14%
XRP (XRP)
$1.63
$98.69B
-1.19%
-55.40%
Bitcoin and Ethereum have faced significant liquidations, falling toward 10-month lows as thin liquidity and shifting U.S. monetary expectations rattle the digital asset space.
The total cryptocurrency market capitalization contracted by 1.71% in 24 hours, reflecting a global 'risk-off' event triggered by the nomination of Kevin Warsh to lead the U.S. Federal Reserve.
Ethereum led the major token declines with a drop of over 8%, highlighting the current fragility in alt-coin markets as institutional participation remains cautious due to strengthening Dollar indices.
