Equity Indices Rebounds from Budget-Led Sell-Off; Gilts Slump on Elevated FY27 Govt Borrow

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

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By Dehuti Jani

February 2, 2026 at 11:39 AM IST

Indian equity markets staged a sharp rebound in the final hour of trade on Monday, snapping back from Budget-related losses seen in Sunday’s special session, aided by strong buying in heavyweight stocks such as Reliance Industries, Adani Ports, BEL, L&T, M&M, ICICI Bank and HDFC Bank. The recovery was broad-based, with mid- and small-cap stocks also ending higher after a weak start to the week.

The BSE Sensex jumped 944 points, or 1.17%, to close at 81,666.46, while the Nifty50 rose 1.06% to 25,088.40. The rebound helped claw back part of the losses triggered by investor disappointment over the Union Budget. However, sentiment remains cautious amid sustained foreign portfolio outflows, with overseas investors net selling about $4 billion worth of Indian equities in January, a trend that has also continued to weigh on the rupee.

Top Movers of the Day

Bharat Electronics surged up to 9% after reporting strong Q3FY26 results, aided by robust order inflows and margin expansion, making it one of the top Nifty gainers.

Hindustan Aeronautics jumped nearly 8% following better-than-expected quarterly earnings and optimistic management commentary on defence order visibility.

Power Grid Corporation advanced around 4% after posting steady Q3 earnings and reaffirming its capex pipeline, supporting defensive buying.

Coal India gained about 3% as higher e-auction volumes and firm realisations improved sentiment around earnings stability.

NTPC rose close to 3% on expectations of improved capacity utilisation and progress on renewable energy projects.

Tata Steel slipped over 4%, emerging as a top laggard, as concerns over global steel demand and weaker realisations weighed on metal stocks.

JSW Steel declined nearly 3% amid profit-taking and pressure across the metal sector following Budget-related uncertainty.

Infosys fell around 2% as IT stocks faced selling pressure after recent gains and cautious near-term outlook commentary.

HDFC Bank eased about 1.5% as financials saw mild profit-booking despite no fresh negative triggers.

Asian Paints dropped close to 2% on concerns over margin pressures and subdued demand trends in the decorative paints segment.

Futures & Options
Nifty February 2026 futures settled higher at 25,149.60, carrying a premium of 61.2 points over the spot Nifty, which climbed 262.95 points or 1.06% to close at 25,088.40, reflecting strong late-session buying in the cash market. Volatility cooled meaningfully, with India VIX tumbling 8.14% to 13.87, signalling reduced near-term risk perception after the post-Budget rebound. HDFC Bank, State Bank of India and Reliance Industries were the most actively traded stock futures on the NSE F&O segment, underscoring continued focus on large-cap index heavyweights.

Bonds
Government bond sold off sharply on Monday, pushing the benchmark 10-year yield higher, after the Union Budget outlined a record borrowing plan for the next fiscal year that exceeded market expectations. The yield on the 10-year 6.48% 2035 bond jumped nearly 8 basis points intraday and ended at 6.7662%, up from 6.6963% on Friday, with the heaviest selling concentrated in the 2029–2035 maturities. The government announced a gross borrowing programme of ₹17.2 trillion for FY27, well above market expectations, triggering concerns over supply pressure and driving yields higher across the curve.

Forex
The rupee strengthened sharply on Monday, rising about 0.5% to close at 91.51 per U.S. dollar from 91.9825 previously, supported by a pullback in crude oil prices and apparent Reserve Bank of India intervention to firmly defend the 92-per-dollar level. The rupee opened at 91.95, touched an intraday high of 91.45, and traded within a narrow range as improving sentiment after the Union Budget and softer oil prices helped the currency recover.

Crypto
Crypto markets saw a sharp risk-off move on Monday, with heavy selling across major tokens. Bitcoin slipped below the key $80,000 support to trade near $76,282, while Ethereum plunged nearly 8%, and large-cap altcoins such as Solana, XRP and BNB fell over 3%. Sentiment was hit by ongoing regulatory concerns in the US and India, rising geopolitical tensions and reports of a fresh Solana hack, pushing the global crypto market capitalisation down 4.65% to about $2.54 trillion.

US Stock Futures
US stock futures slid sharply early on Monday after a steep sell-off in gold and silver rattled risk sentiment, with technology stocks leading losses amid renewed AI trade concerns and lingering uncertainty over Federal Reserve policy. Nasdaq 100 futures fell about 1%, while S&P 500 futures dropped roughly 0.8% and Dow Jones Industrial Average futures declined 0.6%, extending the reversal seen late last week as markets digested mounting macro and policy-related risks.

US Treasury Notes
US Treasury yields edged lower in Asian and early European trading, reversing part of last Friday’s sharp sell-off as markets consolidated after heightened volatility triggered by President Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair. The 2-year Treasury yield slipped 2.3 basis points to 3.502%, while the benchmark 10-year yield also fell 2.3 basis points to 4.217%, reflecting some easing in near-term rate anxiety after the initial policy shock.

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