Markets Swing Ahead of Budget: Historic Sunday Trading Session
Indian stock markets opened for a rare Sunday trading session on February 1, 2026, swinging marginally after starting slightly lower as investors adopted a cautious stance ahead of Finance Minister Nirmala Sitharaman’s ninth consecutive Union Budget presentation. The Sensex, the 30-share pack of the Bombay Stock Exchange (BSE), fell 100 points, while the Nifty, representing the top 50 stocks by market value on the National Stock Exchange (NSE), was down 35 points at 9:15 am.
This marks only the second time in independent India’s history that stock markets have remained open on a Sunday, with the previous instance occurring on February 28, 1999, under the Atal Bihari Vajpayee government. Both exchanges announced special trading sessions to allow investors to react in real-time to Budget announcements, with normal market hours maintained from 9:15 am to 3:30 pm.
Meanwhile, precious metals witnessed a dramatic sell-off, with gold and silver plunging approximately 6 percent following a historic global overnight meltdown that wiped out decades of accumulated gains in commodity markets.
The Rare Sunday Trading Precedent
Why Markets Stayed Open
The decision to keep stock exchanges operational on a Sunday represents an extraordinary measure designed to ensure market continuity and provide investors immediate opportunity to respond to Budget proposals. Both BSE and NSE issued separate circulars confirming that trading would proceed as usual on Budget day, with market hours remaining unchanged and following the standard schedule for a regular trading session.
The pre-open session ran from 9:00 am to 9:08 am, followed by normal equity market trading from 9:15 am to 3:30 pm. However, the exchanges clarified that “trading in the T+0 Settlement Session and Auction Session for settlement default will not be conducted on Sunday, February 01, 2026”.
Trading on a Sunday is uncommon for Dalal Street, as both exchanges typically remain shut on weekends and designated public holidays, making February 1 among the rarest Sundays when markets are open for regular trading.
Historical Context: The 1999 Precedent
The last time Indian stock markets operated on a Sunday was February 28, 1999, during the tenure of Prime Minister Atal Bihari Vajpayee. That Budget, presented by then-Finance Minister Yashwant Sinha, came during a period of economic uncertainty and coalition government politics, making real-time market reaction particularly important.
Nearly 27 years later, the decision to repeat this rare arrangement reflects the significance of Budget 2026 and the government’s desire to maintain market functionality during a critical fiscal announcement.
Market Opening: Cautious Sentiment Prevails
Index Performance at Opening
At 9:15 am on Sunday morning, Indian benchmark indices reflected investor caution:
- Sensex: Down 100 points from the previous close
- Nifty: Down 35 points, trading below key levels
This subdued opening came despite a positive Friday session, where markets had recovered from earlier weakness. On January 31, the Sensex gained 400 points from the day’s low, while the Nifty climbed above the 25,300 mark, aided by optimism ahead of the Union Budget.
Sectoral Trends
Early sectoral movements showed divergent trends:
- Metal index: Slipped 4.48% to 37,106.33, reflecting concerns about global commodity prices and domestic demand
- Commodities index: Declined 2.49% to 7,974.48
- Individual stocks: Tata Steel shares fell approximately 3% in early trading
The weakness in commodity-linked sectors aligned with the broader sell-off in precious metals and reflected global headwinds facing materials and mining companies.
Trading Range and Technical Outlook
Market analysts identified key support and resistance levels for Budget day trading:
Nifty Technical Levels:
- Immediate resistance: 25,450–25,500
- Upside breakout potential: 25,700–26,000 in the short term
- Support: 25,180 region holding ground, preventing potential fall to 24,715–24,650–24,580 levels
Shrikant Chouhan, Head Equity Research at Kotak Securities, advised: “Buy Nifty above 25,550. Keep a stop loss below 25,450. Or sell Nifty below 25,100 and keep a stop loss at 25,200”.
Ponmudi R, CEO of Enrich Money, noted: “A favourable Budget reaction could trigger an upside breakout, while any disappointment or profit-booking may pull indices back towards lower support zones. Until there is clarity from the Budget, the overall bias remains cautious to neutral”.
Market Expectations from Budget 2026
Tax Relief Demands
Investors entered Budget 2026 with tempered expectations after the 2025 Budget delivered significant income tax relief. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, stated: “Investors don’t have expectations of any major tax reliefs in this Budget since the 2025 Budget delivered huge income tax reliefs. Some tweaking of certain taxes is likely”.
However, specific expectations included:
Capital Gains Tax:
- Increase in exemption for long-term capital gains tax from Rs 1.25 lakh to a higher limit
- Potential exemption from LTCG tax for certain categories of Foreign Institutional Investors (FIIs)
Vijayakumar emphasized: “If there is an increase in exemption for long-term capital gains tax from Rs 1.25 lakh presently to a higher limit, that would be a positive. From the market perspective, a fiscally prudent, growth-oriented Budget is desirable”.
He added: “There are rumours of exemption from long-term capital gains tax for certain categories of FIIs. If this happens, it can trigger a rally in the market”.
Fiscal Deficit and Capex Focus
Markets closely tracked the government’s fiscal deficit target, expected to be pegged at around 4.3–4.4 percent of GDP for FY27. Anticipation also centered on double-digit growth in capital expenditure (capex), which would signal the government’s commitment to infrastructure development and economic growth.
Ponmudi R emphasized: “Sharp moves are possible in either direction depending on announcements related to fiscal policy, capex push, sector-specific incentives and the fiscal deficit target, which is expected to be around 4.3–4.4 per cent of GDP for FY27”.
Sector-Specific Hopes
Key sectors awaited Budget announcements:
- Export sectors: Seeking relief measures to boost competitiveness
- Manufacturing: Hoping for production-linked incentive (PLI) scheme expansions
- Infrastructure: Anticipating higher capex allocation
- Agriculture: Looking for rural income support measures
VK Vijayakumar noted: “Any clarity on alternative oil supplies helps reduce concerns over energy security and import costs, which supports overall market sentiment”.
Historical Budget Day Performance: A Reality Check
The 0.19% Average Move
Despite the typical hype and anticipation surrounding Budget announcements, historical data reveals that Budget day itself tends to be a non-event for Indian stock markets. Data from the last 15 years shows Nifty’s average Budget day move is a negligible 0.19%, while the week after the event has delivered returns seven times larger.
Historical data further suggests that markets typically weaken in the pre-Budget week (Nifty down 0.52% on average), consolidate on the day itself, and then rally once uncertainty lifts. The average Budget day move stands at 0.42% for Nifty Bank.
Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, observed: “Union Budget days tend to attract disproportionate attention, but historical data suggests that the real market story often unfolds after the Budget rather than on the day itself”.
Notable Exceptions: When Budgets Moved Markets
While most Budgets produce muted immediate reactions, certain years have delivered significant volatility:
Positive Reactions:
The Sensex jumped over 2 percent and the Nifty climbed almost 2.7 percent in one recent Budget, marking one of the best Budget day gains in recent years.
Negative Reactions:
- 2016: Higher dividend taxation dampened sentiment, and the Sensex ended the day in the red
- 2018: The introduction of long-term capital gains tax on listed equities and equity mutual funds caught markets off guard. Although indices slipped only modestly on the day, they fell around 6.8 percent over the following sessions
These historical precedents underscore that while immediate Budget day reactions may be subdued, the medium-term market impact depends on specific policy announcements—particularly those affecting taxation and capital flows.
The Gold and Silver Crash: A Historic Meltdown
The Magnitude of the Sell-Off
While equity markets remained relatively stable, precious metals experienced a catastrophic collapse ahead of Budget 2026. Gold and silver prices crashed approximately 6 percent on the Multi Commodity Exchange (MCX) on Sunday, deepening the shock from a historic two-day global meltdown that wiped out decades of accumulated gains in precious metals.
The Global Trigger:
The deeper collapse overseas came after a devastating Friday session where:
- Silver: Plunged as much as 37 percent intraday—the steepest single-day decline ever recorded
- Gold: Tumbled 12 percent in the spot market—the biggest single-session decline since the early 1980s
This dramatic fall occurred after Indian equities had shut for trading on Friday, leading to a sharp gap-down opening on MCX when markets reopened Sunday.
Current Price Levels
As of Sunday morning:
- Gold: Trading at Rs 1.4 lakh per 10 grams
- Silver: Sitting at Rs 2.74 lakh per kilogram
- MCX shares: Opened 9 percent lower as exchange-linked volatility rippled across the market
Gold and silver ETFs braced for another round of price adjustments after falling 15 to 20 percent on Friday.
What Triggered the Meltdown?
Choice Wealth identified the collapse as “classic profit-taking after Thursday’s record highs”. The global panic followed:
- Fears of tighter policy after reports of a hawkish Federal Reserve chair pick by President Trump
- A stronger dollar that crushed overbought metals
- Extreme positioning and leveraged speculation unwinding violently
PL Wealth noted that silver’s rally over the past year reflected safe-haven flows, tight supply, and strong industrial use tied to solar, electronics, and manufacturing. The firm pointed out that silver carries historical volatility in the 25 to 35 percent range, which explains the severity of the correction.
Budget Speculation on Import Duties
The crash landed just hours before the Budget, feeding into long-standing speculation that the government may announce a cut in bullion import duty.
Current Duty Structure:
- Gold and silver bars attract about 6 percent basic customs duty
- Plus 3 percent GST at import
- Effective total load: approximately 9 percent
This is already far lower than the peak 15 percent duty regime of earlier years, when high taxes drove smuggling and created a large gap with global prices.
Budget Speculation:
Market chatter centers on whether a trim from 6 percent to around 4 percent is coming. Such a move could:
- Pull local prices down by Rs 2,000 to Rs 3,000 per 10 grams of gold
- Reduce silver prices by about Rs 6,000 per kilogram (assuming global benchmarks stay steady)
Policy Tension:
The government faces competing pressures:
- Pro-Cut Arguments: Makes bullion cheaper for households and exporters, supporting demand
- Anti-Cut Arguments: A hike protects the rupee and shields the current account from large gold import bills
Traders noted this tug-of-war is “amplifying every tick in global prices and turning the sell-off into something more frantic than fundamentals alone would justify”.
Expert Advice Amid the Chaos
Choice Wealth advised investors to diversify, avoid panic selling, and stay patient if their view is long-term.
PL Wealth recommended staggered entries instead of lump-sum bets, given silver’s inherent volatility.
The consensus among analysts was clear: while the magnitude of the crash was shocking, precious metals investors with long-term horizons should resist the temptation to panic-sell at depressed levels, especially with Budget announcements potentially providing further volatility in either direction.
What Lies Ahead: Post-Budget Market Trajectory
Volatility Expected
Given the historic precedent and current market positioning, analysts anticipated significant intraday volatility on Budget day. Ponmudi R warned that “markets are likely to remain volatile around the Budget” with “sharp moves possible in either direction”.
The 25,180–25,400 band was identified as the likely trading range, with oscillators permitting further upside to 25,580–25,800, though weak momentum raised questions about sustainability.
The Real Action Comes Later
Historical patterns suggest that regardless of Sunday’s immediate reaction, the more significant market moves typically emerge in the days and weeks following the Budget as investors digest policy details, sector-specific implications, and medium-term growth trajectories.
The week after Budget announcements has historically delivered returns seven times larger than Budget day itself, indicating that patient investors who look beyond immediate headlines often capture more meaningful opportunities.
Conclusion: A Day of Anticipation and Uncertainty
As Indian markets swung through a rare Sunday trading session, investors found themselves navigating multiple sources of uncertainty. Equity indices opened lower but remained within expected ranges, reflecting cautious optimism tempered by realistic expectations after last year’s generous tax relief measures.
The dramatic 6 percent collapse in gold and silver added an element of chaos to Budget day proceedings, with commodity traders scrambling to assess whether the historic meltdown represents a buying opportunity or signals further pain ahead. Budget speculation on potential import duty cuts injected additional volatility into an already frenzied precious metals market.
As Finance Minister Nirmala Sitharaman prepared to deliver her ninth consecutive Budget at 11 am, markets awaited clarity on capital gains tax treatment, fiscal deficit targets, capex allocations, and sector-specific incentives. Whether these announcements trigger the anticipated rally or disappoint investors seeking relief would determine not just Sunday’s closing levels, but more importantly, the market trajectory for weeks to come.
For now, Indian equity markets remained in wait-and-see mode—trading on a historic Sunday, absorbing a global precious metals crash, and preparing for policy announcements that could shape investment decisions and economic growth for the year ahead.