Indian Stock Market Trends: Sensex & Nifty Rebound Amid Budget Volatility – February 3, 2026 Analysis
Did Budget 2026-27’s STT bomb crater markets… or ignite infra multibaggers like Power Grid (+7.42%)? Unpack 7.4% GDP fireworks, RBI’s 5.25% rate magic, top 10 stocks screaming BUY for 2026. What’s YOUR next big pick before Nifty hits 25,400?
Indian stock markets showed resilience on February 2, 2026, with BSE Sensex closing at 81,666.46 (up 1.17%) and NSE Nifty 50 at 25,088.40 (up 1.06%) after Budget 2026-27 reactions. This briefing delivers fresh insights for investors seeking market prediction India on Tuesday, February 3, amid low CPI inflation trends India and RBI repo rates at 5.25%.
Indian Market Overview
BSE Sensex surged 943 points to 81,666.46, driven by infrastructure and auto stocks like Power Grid and Tata Motors. NSE Nifty 50 reclaimed 25,000, gaining 262 points to 25,088, with broad recovery except IT and healthcare. Nifty Bank edged up 0.35% to 58,619, though under pressure below 58,500; investor sentiment turned cautiously optimistic post sharp Budget day sell-off, with India VIX easing but signaling volatility.
Expert commentary from Motilal Oswal’s Siddhartha Khemka highlights constructive near-term momentum, while HDFC Securities’ Nagaraj Shetti notes bulls attempting comeback, with resistance at 25,200-25,400.
Key Economic Drivers
India’s GDP growth for FY26 hit 7.4%, up from 6.5% prior, with Q3 at 8.2%; IMF raised FY26 forecast to 7.3%. CPI inflation stayed low at 1.33% in December 2025, projected at 2% for FY26, enabling RBI’s 25 bps repo rate cut to 5.25% in January 2026.
BNP Paribas anticipates another 25 bps cut in February amid benign inflation, supporting growth; unemployment data remains stable, though rural recovery aids consumption. These factors link to market rebound, as lower rates boost bluechip stock picks in banking and autos.
NIFTY Today
- Opening: Weak start post-Budget, dipping to 24,679 low before sharp 429-point recovery.
- Closing: 25,088.40 (+1.06%), above key 25,000 support.
- Top Gainers: Power Grid (+7.42%), Adani Ports (+4.28%), Reliance (+3.04%).
- Top Losers: Shriram Finance (-3.17%), Axis Bank (-2.33%), Max Healthcare (-1.82%).
- Volume Leaders: High turnover in equity derivatives at ₹2.48 lakh crore.
- Technical Outlook: Support at 24,900, resistance 25,200; RSI neutral post-oversold bounce.
- Sentiment: FII mixed, DII supportive; rupee at 91.51.
BSE Sensex vs Nifty 50 Trends – February 2026
| Metric | BSE Sensex (Feb 2 Close) | NSE Nifty 50 (Feb 2 Close) | Month-to-Date Change | YTD 2026 Performance |
| Closing Value | 81,666.46 [+1.17%] | 25,088.40 [+1.06%] | Sensex +2.1% | Nifty +7.39% |
| Key Driver | Infra, Auto gains | Broad recovery minus IT | Budget volatility | GDP boost |
| P/E Ratio (TTM) | ~23.5x | ~22.8x | Stable | Elevated |
| Volatility (VIX) | India VIX down 10% | Same | Elevated | Managed |
Sensex outperformed slightly on large-cap weightage; Nifty broader but IT drag. Feb trends show post-Budget correction then rebound.
Impact of Budget 2026-27 on Stock Market
The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, targeted a fiscal deficit of 4.3% of GDP (down from 4.4% RE for 2025-26), with net market borrowings at ₹11.7 lakh crore and gross at ₹17.2 lakh crore. It emphasized fiscal consolidation (debt-to-GDP at 55.6%), capex hike to ₹12.2 lakh crore, GST simplifications (termed GST 2.0), and reforms like taxing buyback proceeds as capital gains.
Markets reacted sharply volatile: Nifty plunged 1.96% to 24,825.45 (low ~24,597), Sensex -1.88% to 80,722 amid profit-booking triggered by STT hikes on derivatives—futures to 0.05% (from 0.02%), options premium/exercise to 0.15% (from 0.1%/0.125%). Capital market stocks like MCX (-12%), Angel One/BSE (-8%) tanked; PSU banks dipped on merger review fears.
Positive Impacts:
- Capex Push: ₹12.2 lakh crore allocation boosted infra (Power Grid +7.42% on Feb 2), construction, cement; transport/defense top recipients.
- Defense Boost: Outlay ~₹7.85 lakh crore (+15%), capex ₹2.31 lakh crore (+28%) aided BEL, HAL; Atmanirbhar push.
- Consumption Relief: Rural schemes, tax tweaks supported FMCG/staples; rural recovery aids volume growth.
- AI/Data Centres: Roadmap spurred IT/realty allied sectors.
Negative Impacts:
- STT Hike: Curbed F&O speculation, raised trader costs; high-volume strategies hit.
- Healthcare/Pharma Mixed: Limited sops; capex elsewhere diverted focus.
- PSU Banking Drag: Merger panel concerns; elevated borrowing pressured Nifty Bank.
Sector Boosts:
- Defense/BFSI overweight (select); infra, cap goods multibaggers.
- Rural/staples from volume recovery; energy/power steady.
Overall Recovery: Feb 2 rebound (Nifty +1.06% to 25,088) signals digestion; rupee at 91.51 strengthened on reserves. Analysts see constructive momentum if FII inflows resume, with infra/defense as long-term winners amid 7.4% GDP glide path.
Latest News Highlights
Budget Aftermath: Nifty staged a strong recovery, gaining 429 points from its intraday low of ~24,679 to close at 25,088 on February 2; bulls now target 25,200-25,400 resistance ahead of Tuesday expiry. Immediate impacts included 2-3% gains in Auto (Tata Motors PV +~4%), Metals (Hindalco), Oil & Gas (MRPL, HPCL +5-10%), led by capex optimism.
RBI Policy Echo: RBI's recent 25 bps repo rate cut to 5.25% in January bolsters easing cycle; BNP Paribas forecasts another 25 bps in February 2026, citing benign inflation and supportive liquidity for growth transmission.
Corp Earnings: Bank of Baroda reported Q3 FY26 net profit of ₹5,054 crore, up 4.5% YoY on lower provisioning and 14.7% advances growth (retail +17.4%); non-interest income +5.9% to ₹3,600 crore. Northern Arc Capital's Q3FY26 NII rose 39% YoY to ₹371 crore, NIM at 9.3%; fee income strong amid microfinance tailwinds.
Global Tariffs: US President Trump announced a bilateral trade deal on February 2, slashing tariffs on Indian goods from 25% to 18% (removing punitive 25% on Russian oil ties); India commits to $500B US purchases, zero tariffs on US goods—boosting exports but adding alignment pressures.
Rupee Rally: USD/INR strengthened 0.32% to 91.3870 (+~47 paise from prior), supported by FX reserves and inflows; YTD rupee resilient despite volatility.
Impacts:
- Boosts consumption/auto/metals short-term via capex/rural sops.
- Easing rates favor BFSI NII.
- Trade deal cushions exports, offsets tariff risks.
- Earnings affirm banking stability.
- Rupee aids importers; FII flows key for volatility control.
Foreign Indices Movements Influencing Indian Markets
Asian peers pressured open: Nikkei 225 -1.25%, Hang Seng -2.23% on risk-off. US Dow, S&P mixed; 2026 YTD Hang Seng +28.7%, Nikkei +26.3% drove rotation to Asia.
| Index | Recent Move (Feb 2) | YTD 2026 | Impact on India |
| Nikkei 225 | -1.25% | +26.3% | Earnings rotation |
| Hang Seng | -2.23% | +28.7% | China stimulus spill |
| Dow Jones | Mixed mid-session | +14.5% | Value factors |
Weak Asia capped gains, but recovery decoupled on domestic cues.
Performance Overview
Top 10 Stocks to Buy on NSE/BSE for 2026
- HDFC Bank (P/E 18x, DY 1.2%): Stable growth, sector triggers post-rate cuts.
- ICICI Bank (P/E 19x, DY 0.8%): Strong NII, BFSI overweight.
- Reliance (P/E 25x): Retail, energy diversification.
- TCS (P/E 30x, DY 1.5%): IT recovery FY27.
- ITC (P/E 28x, DY 3%): FMCG shift, low debt.
- BEL (P/E 50x): Defense boom.
- M&M (P/E 22x): Auto SUV demand.
- NTPC (P/E 15x, DY 2.5%): Power capex.
- Apollo Hospitals (P/E 80x): Healthcare select.
- Trent (P/E 100x): Retail expansion.
Rationale: Low debt, earnings growth >15% CAGR, aligned with GDP 7.4%.
Day's Top 10 Gainers and Losers (Feb 2, NSE)
| Rank | Gainers (NSE) | % Change | Analysis | Losers (NSE) | % Change | Analysis |
| 1 | POWERGRID | +7.42% | Infra Budget boost | SHRIRAMFIN | -3.17% | NBFC caution |
| 2 | ADANIPORTS | +4.28% | Ports volume | AXISBANK | -2.33% | Bank Nifty drag |
| 3 | RELIANCE | +3.04% | Energy retail | MAXHEALTH | -1.82% | Healthcare post-Budget |
| 4 | HINDALCO | +3.07% | Metals rebound | INFY | -1.66% | IT weak cues |
| 5 | M&M | +2.71% | Auto sales | CIPLA | -1.08% | Pharma volatility |
| 6 | LT | +2.62% | Capex play | TCS | -0.62% | Earnings wait |
| 7 | BEL | +3.63% | Defense orders | TITAN | -0.59% | Consumption pause |
| 8 | NTPC | +2.22% | Power demand | TRENT | -0.32% | Retail profit booking |
| 9 | INDIGO | +2.19% | Aviation recovery | BAJAJ-AUTO | -0.27% | Auto mix |
| 10 | ULTRACEMCO | +2.11% | Cement infra | ONGC | -0.02% | Oil steady |
Gainers led by infra/energy; losers banking/IT on selective selling.
Sector Performance: India 2026
Leading sectors show divergence: Auto/Oil&Gas/Metals up post-recovery.
| Sector | Feb 2 Change | YTD 2026 | Key Earnings/Market Report |
| IT | -0.5% | +5% | Value-led recovery FY27 |
| Banking (Nifty Bank) | +0.35% | +8% | Repo cuts, NII growth |
| Pharma/Healthcare | -1% | +12% | Select gains despite Budget |
| Consumer Goods | +0.96% Midcap | +10% | Rural recovery 8.4%, GST cuts |
Banking, consumption overweight; IT neutral. Fresh Q3 data supports 7.3% GDP alignment.
Analysis and Recommendations
Actionable insights: Markets digest Budget volatility; focus rate-sensitive sectors amid 2% CPI. Diversified portfolio for risk appetites:
Low Risk (Conservative): 40% Banks (HDFC/ICICI), 30% ITC/NTPC, 30% Gold ETF. Pros: DY 1.5-3%, stable; Cons: Lower alpha; Earnings: NII up.
Medium Risk (Balanced): 30% Reliance/M&M, 30% BEL/LT, 20% TCS, 20% Consumer (Trent). Pros: Growth 15% CAGR; Cons: Volatility; Drivers: Capex, defense.
High Risk (Aggressive): 40% Midcaps (NBCC/Anant Raj), 30% Metals (Hindalco), 30% Power (Adani Ports). Pros: Multibagger potential; Cons: Budget sensitivity; Recent: Infra surge.
Stock Recommendations for Today (February 3, 2026)
Markets open with Nifty eyeing 25,200 resistance amid Budget volatility; focus on infra, defense, and select PSUs for intraday trades. Here's detailed picks with targets, stop-losses, and rationale based on technicals and news.
- NMDC (Buy ₹81-82, Target ₹90, SL ₹75): Broke swing high at 80 with support from 20/40 DEMA; momentum positive crossover. Metals rebound post-Budget.
- DLF (Buy ₹627-628, Target ₹700, SL ₹575): Reversal from 200 WMA, demand zone hold; exiting oversold. Realty infra boost.
- Blue Star (Buy ₹1838-1839, Target ₹2030, SL ₹1680): Broke ascending trendline and 200 DEMA; strength in momentum. AC demand seasonal.
- IOC (Buy ₹164-165, Target ₹175, SL ₹155): Ascending trendline breakout, 20 DEMA support; consolidation upside. Oil steady.
- Mahindra Lifespace (Buy ₹383-385, Target ₹440-450, SL ₹365): Broke ₹375 resistance in bullish channel; Feb targets ~₹518 long-term. Infra play.
- BEL (Accumulate on dips): Defense capex 18% hike; Atmanirbhar focus. YTD strong.
- L&T (Buy dips to ₹3,500, Target ₹3,800): Infra orders, smart cities; earnings visibility.
- ICICI Bank (Long-term Hold/Buy ₹1,334, Target ₹1,750): Retail growth, disciplined metrics; 31% upside.
- Power Grid (Buy dips ₹300, Target ₹340): Yesterday +7.42%; Budget infra tailwinds persist.
- Reliance (Accumulate): Core portfolio; diversified, infra push.
Key Levels: Nifty support 24,900-25,000, resistance 25,400; Bank Nifty 58,500-60,400 range. Avoid heavy bets; watch FII/DII flows and VIX at 15.10.
Final Thought
Indian stock markets demonstrated remarkable resilience on February 2, 2026, with the BSE Sensex surging 943 points to 81,666 and NSE Nifty 50 reclaiming 25,088 amid Budget 2026-27 digestion. Key takeaways: This rebound signals successful absorption of fiscal measures, underpinned by robust 7.4% GDP growth, benign 2% CPI inflation, and RBI's accommodative 5.25% repo rate—setting infrastructure and banking sectors to lead 2026 gains.
Unique insights reveal Nifty testing a critical low of 24,679 before sharp recovery, with India VIX peaking then easing under control, highlighting managed volatility. Standout performers like Power Grid (+7.42%) underscore infra tailwinds, while bluechips position for sustained upside.
