Indian Equities Bounce Back as Market Digests Quotes on Disappointment Over Budget Tax Plan

Indian stock markets staged a recovery on Monday following a sharp sell-off during weekend trading, as investors reassessed their positions following the government’s announcement to impose higher taxes on equity derivatives trading. The benchmark BSE Sensex climbed 450 points, gaining 0.6 percent to reach 81,175, reversing Sunday’s steep 2 percent decline. The broader NSE Nifty index rose 47 points, or 0.2 percent, to 24,872. The market movement coincided with easing geopolitical tensions between the U.S. and Iran, which helped ease energy prices down by over 3 percent.

Budget Proposal Triggers Market Concerns Despite Recovery

The weekend’s sharp downturn reflected strong investor concerns following quotes on disappointment over the Union Budget 2026-27’s proposal to increase taxes on equity derivatives. While Monday’s rebound suggested some stabilization, market participants remain cautious about the longer-term implications of the tax hike on trading activity and market liquidity.

Selective Stock Performance Reflects Earnings Jitters

Performance across individual securities revealed a mixed picture. Adani Green Energy jumped 4 percent following clarification on a civil litigation matter involving the U.S. Securities and Exchange Commission. Larsen & Toubro, Asian Paints, and Adani Ports each posted gains around 3 percent. However, several large-cap names faced headwinds ahead of earnings announcements. Hyundai Motor slipped more than 2 percent, while Tata Chemicals fell 2.5 percent, Bajaj Housing Finance dropped 1 percent, and RailTel Corp declined 1.3 percent. ITC led the downside with a 1.2 percent decline following an excise duty increase on cigarettes in the budget. Quess Corp fell over 2 percent after receiving a final tax assessment resulting in a Rs. 160 crore demand from the Income Tax Department.

Market Sentiment Remains Fragile Amid Policy Uncertainty

The market’s recovery Monday evening came as investors balanced disappointment over the new tax measures with relief from moderating oil prices and encouraging developments in select large-cap stocks. However, quotes on disappointment regarding the budget’s impact on derivatives trading continue to weigh on sentiment, suggesting that market confidence may remain vulnerable to further policy clarifications or earnings surprises.