After Budget rout, markets rebound strongly; Sensex, Nifty rise over 1%; RIL, Power Grid, Adani Ports lead rally
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After a steep fall on Budget Day, Indian equity markets rebounded sharply on Monday, with benchmark indices BSE Sensex and NSE Nifty rising as much as 1.2% during the session. The recovery was driven by bargain hunting after the sharp sell-off in the special Budget Day session, when benchmarks had dropped nearly 2% following a negative market reaction to the proposed hike in the Securities Transaction Tax (STT) on futures and options. A sharp decline in global crude oil prices also provided relief, reflecting signs of easing geopolitical tensions between the US and Iran.
The Sensex closed 943 points, or 1.17%, higher at 81,666, while the Nifty50 ended the session 1.06% higher at 25,088. The overall market capitalisation of BSE-listed companies rose by over ₹5 lakh crore to ₹455.26 lakh crore, after eroding nearly ₹10 lakh crore in the previous session.
During the session, the 30-share Sensex gained as much as 1,009 points to hit an intraday high of 81,732.25, while the NSE Nifty climbed up to 283 points, briefly reclaiming the 25,100 level.
Broader markets also bounced back sharply from their intraday lows, with the Nifty Midcap rising 0.96% and the Nifty Small-cap gaining 0.6%. Market breadth remained weak, with 2,209 stocks declining, 2,046 advancing and 173 ending unchanged on the BSE. As many as 360 stocks touched their 52-week lows, while only 76 stocks hit fresh 52-week highs.
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Top gainers and losers
On the BSE Sensex, 24 of the 30 stocks ended in positive territory, led by Power Grid Corporation , Adani Ports , Bharat Electronics (BEL) , Reliance Industries , and Mahindra & Mahindra .
State-owned Power Grid topped the gainers’ chart, rising 7.55% to ₹270. Adani Ports advanced 4.61%, while defence major BEL climbed 3.75%. Index heavyweight Reliance Industries gained 3.05%, aided by bargain buying after a 3.76% decline in the previous session. M&M, L&T, IndiGo, UltraTech Cement and NTPC rose between 2% and 3%, lending support to the benchmarks.
Other notable gainers included Tata Steel, ITC, Asian Paints, Bajaj Finserv, ICICI Bank, Maruti Suzuki, Sun Pharma, SBI and Bharti Airtel.
On the downside, Axis Bank was the biggest laggard among index stocks, slipping 2%. IT majors remained under pressure, with Infosys, TCS, Tech Mahindra and HCL Technologies ending lower amid weak sector sentiment. Consumer discretionary stocks such as Titan and Trent also declined, while Kotak Mahindra Bank closed marginally in the red.
Sectoral performance
On the sectoral front, barring IT and healthcare, all NSE indices ended in positive territory. The Nifty Auto index led the gains, rising 2.13%, followed by Nifty Oil & Gas, which climbed 2.04%, and Nifty Metal, up 1.88%, supported by improved risk appetite.
Other sectors also posted healthy gains. Nifty Realty rose 1.61%, Nifty FMCG gained 1.16%, and Nifty PSU Bank ended 0.87% higher. Nifty Financial Services and Financial Services ex-Bank indices added around 0.6–0.7%, reflecting selective buying in financial stocks.
What fuelled the rally?
Market analysts said the Budget’s policy continuity, coupled with a clear emphasis on growth and fiscal prudence, helped reinforce confidence in the medium- to long-term earnings outlook.
“The market witnessed a smart recovery following yesterday’s volatile session triggered by the STT hike on F&O and the government’s higher borrowing plan for FY27. At the same time, policy continuity with a focus on growth and fiscal discipline has strengthened confidence in the medium- to long-term earnings outlook,” said Vinod Nair, Head of Research at Geojit Investments.
However, he cautioned that near-term sentiment may remain cautious amid below-estimate Q3 earnings and ongoing global uncertainties.
According to Abhinav Tiwari, Research Analyst at Bonanza, the recovery was also supported by improving macro signals. The rupee strengthened from record lows, aided by rising forex reserves and the RBI’s proactive liquidity management through FX swaps, while softer crude prices helped ease inflation concerns.
While selective value buying in large-cap stocks offered near-term stability, overall sentiment remained guarded amid elevated volatility, said Ponmudi R, CEO of Enrich Money. “In contrast, small- and mid-cap stocks underperformed, while capital-market-related names remained under pressure due to the proposed STT hike and higher transaction costs. Near-term market direction will depend on global macro cues, clarity on Budget execution and a revival in institutional risk appetite,” he said.
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