India Stocks: Reliance leads partial recovery in Indian stocks from budget day selloff

Oil India

02/02/2026 10:13

Updates for market close

By Bharath Rajeswaran and Vivek Kumar M

Feb 2 (Reuters) - India's equity benchmarks advanced on Monday, led by gains in infrastructure stocks and bargain hunting in heavyweight Reliance Industries, as markets partially recovered from damage taken after the federal budget.

The Nifty 50 .NSEI rose 1.06% to 25,088.4, while the BSE Sensex .BSESN added 1.17% to 81,666.46. Intraday, the indexes swung between gains of 1.3% and losses of 0.6%.

The benchmark indexes fell about 2% on Sunday,
marking
 their biggest budget-day percentage drop in six years, settling at the lowest levels seen since November.

"We see limited downside risk (for Nifty) after a 2% drop on Sunday," said analysts led by Seshadri Sen of Emkay Global Financial Services.

The budget continued to prioritise infrastructure and manufacturing while maintaining fiscal discipline, making Sunday's reaction a knee-jerk response, according to three analysts.

Sunday's sell-off was triggered by the proposal to hike the securities transaction tax on derivatives, higher-than-expected gross borrowing for fiscal year 2027 and the absence of cuts in capital gains tax or measures to attract foreign inflows.

"The impact on large institutional hedging strategies due to STT hike is likely to be limited," said Anand Gupta, lead portfolio manager of Indian equities at Allianz Global Investors.

"Historically, marginal increases in STT have not had a material impact on market participation, liquidity or hedging activity," he said.

Fourteen of the 16 major sectors logged gains on the day. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 rose 0.6% and 1%, respectively.

        Oil-to-telecom conglomerate Reliance Industries RELI.NS jumped 3.2% making it the biggest contributor to benchmark gains. The move marked a recovery from a 3.5% drop on budget day.

Traders piled into infrastructure major Larsen & Toubro's LART.NS shares, which rose 2.8%, boosted by the budget's focus on capital expenditure.

Shriram Finance SHMF.NS declined 3.2%, emerging as biggest loser on the Nifty 50 index on concerns that higher borrowing by the government would raise its funding costs.

 (Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Eileen Soreng, Harikrishnan Nair, Sonia Cheema and Ronojoy Mazumdar)

 ((VivekKumar.M@thomsonreuters.com;))