Budget 2026: The immediate market reaction to Budget 2026 was sharp and emotional with the Indian stock markets cracking around 2% in the special budget session on Sunday, February 1. The increase in Securities Transaction Tax (STT) on futures and options, the absence of headline tax giveaways, and the pressure on brokerage and exchange stocks triggered visible volatility across indices. However, latest developments in the India-US trade deal have led to a recovery in the stock markets with US President Donald Trump reducing tariffs from 25% to 18%.
However, beneath the surface, market experts believe the Budget sends a far more powerful signal — one of predictability, discipline, and long-term capital formation.
Rather than offering short-term excitement, the Budget focused on fiscal consolidation, sustained capital expenditure, infrastructure expansion, and regulatory reforms that improve market access for foreign investors. For investors with a medium- to long-term horizon, this combination may prove more valuable than any immediate tax relief.
Vikas Satija, MD & CEO, Shriram Wealth, summed up this sentiment clearly: “The Budget is less about instant gratification and more about reinforcing long-term discipline. While there were no headline tax giveaways for investors, the continued focus on fiscal consolidation, capital expenditure, infrastructure growth, and economic stability creates a supportive backdrop for sustainable wealth creation.”
He emphasized that markets often reward policy predictability more than populist measures, and that in the absence of disruptive tax changes, investors should stay focused on asset allocation, earnings growth, and time in the market rather than tax arbitrage. According to him, this Budget quietly strengthens the foundation for compounding wealth over time.
Why the Budget is a win for long-term investors?
A key talking point has been the STT increase, which raised costs in the derivatives segment. In her Budget speech, Sitharaman said the STT on futures contracts will be raised to 0.05% from 0.02%. Meanwhile, STT on options premiums and exercise of options are both proposed to be raised to 0.15% from the present rate of 0.1% and 0.125%, respectively.
However, experts see this as a recalibration rather than a setback.
Swapnil Aggarwal, Director, VSRK Capital, said,
“Union Budget 2026 marks a critical phase for the Indian capital markets. Although the increase in Securities Transaction Tax (STT) on Futures from 0.02 % to 0.05 % and on Options premiums has caused short-term setbacks in derivatives trading volumes and impacted brokerage and exchange stocks heavily, it also symbolizes the Government’s effort to standardize market participation costs.”
He pointed out that while the STT hike has led to sell-offs in broking stocks and heightened volatility, another major reform has gone relatively underappreciated — the easing of the Portfolio Investment Scheme. The move to allow foreign individuals to directly buy Indian equities, with the individual limit raised from 5% to 10% and the overall cap increased from 10% to 24%, could open the door to deeper and more stable foreign participation at a time when traditional FPI flows have slowed.
According to him, this could gradually improve liquidity and create opportunities in infrastructure, financials, manufacturing, and export-oriented sectors as foreign participation broadens.
Stocks to buy after Budget 2026
Various brokerages have suggested top stock picks to buy after Budget 2026. Let’s take a look –
Prabhudas Lilladher – The domestic brokerages likes Adani Ports, Bharti Airtel, Britannia Industries, Hindustan Aeronautics, ICICI Prudential AMC, L&T, M&M, and UltraTech Cement in large-caps.
While in mid- and small-caps, it prefers Amber Enterprises, Aster DM Healthcare, LG electronics, Max Healthcare and Supreme Industries.
Axis Securities – The brokerage has identified Ultratech Cement, Ashok Leyland, Max Healthcare, HCL Technologies, Welspun Living, Embassy Office Park REIT, Ahluwalia Contract, and Biocon among its top post budget picks.
Angel One – The brokerage has picked Dr. Reddy’s Laboratories, Biocon, Sun Pharma, Zydus, Serum Institute, Tata Electronics, Micron India, Dixon, Raymond, Arvind, Welspun, Trident, Vardhman, RSWM, KVIC, HDFC Bank, ICICI Bank, SBI, PFC, and REC as its top post budget stocks to buy.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
