Indian stock markets saw mixed reactions around February 2, 2026, as investors digested the Union Budget 2026 announcements and awaited further economic cues. A significant hike in the Securities Transaction Tax (STT) on derivatives trading caused a notable downturn in exchange and brokerage stocks, impacting key players like BSE and Groww. Meanwhile, the privatization of IDBI Bank moved into its critical final stages, and select public sector undertakings (PSUs) gained attention for potential dividend payouts.[angelone+7]
Derivatives Tax Hike Hits Exchange Stocks
The Bombay Stock Exchange (BSE) saw its shares plummet by 15% on February 1, 2026, following the Union Budget's proposal to increase the Securities Transaction Tax (STT) on futures and options (F&O) trades.This move aims to raise the tax on futures contracts from 0.02% to 0.05% and on options premiums from 0.1% to 0.15%.The sharp increase in STT is expected to raise trading costs, potentially reducing activity in the derivative market.[angelone+5]
BSE Managing Director and CEO Sundararaman Ramamurthy, however, defended the government's decision. He stated the policy aligns with the 'Viksit Bharat' initiative, encouraging long-term equity investment and capital formation.Despite these reassurances, the immediate market reaction was negative, with BSE's Mojo Score downgraded to "Hold" from "Buy" on February 1, 2026, reflecting a more cautious analyst stance.[whalesbook+1]
Shares of Billionbrains Garage Ventures, the parent company of fintech platform Groww, also experienced a sharp decline. The stock fell by 4.64% intraday on February 2, 2026, hitting a low of ₹160.15 on the BSE. This drop extended a previous session's nearly 5% decline, as the increased STT rates on derivatives trading led to a broad sell-off across brokerage and exchange-related stocks. In other news, Groww formally incorporated a wholly-owned subsidiary, Groww Foundation, on February 2, 2026, focusing on philanthropic activities.[m+1]
PSU Stocks and MOIL in Focus
The public sector banking sector faced a significant downturn on February 1, 2026, as market participants reacted to the Budget 2026 announcements. Major lenders like State Bank of India (SBI) saw their stock dive by 5.61%, with Bank of India falling 8.41% and Indian Bank decreasing by 7.30%. Analysts noted a lack of specific incentives for PSU bank recapitalization or direct credit growth stimuli in the budget, leading to profit-booking by investors.[multibagg+1]
Conversely, the Union Budget 2026 set an ambitious ₹3.8 lakh crore non-tax revenue target for the government, primarily from dividends from the Reserve Bank of India and Central Public Sector Enterprises (CPSEs). This target has identified "Dividend Kings" such as Coal India, ONGC, and NTPC as "Must-Buy" picks for investors seeking passive income. These companies demonstrated strong Q3 FY26 earnings with high free cash flow, and government guidelines mandate minimum dividend payouts, which are now expected to reach their upper limits.[multibagg+2]
MOIL, a major manganese ore producer, announced price increases for February 2026. Most ferro, fines, SMGR (30%), and chemical manganese ore grades saw a 5% price hike from February 1, while UKF532 Metal Mandi Fine experienced a sharper 10% increase. However, MOIL's stock showed a shift to a more pronounced bearish trend, declining by 5.73% on February 3, 2026, closing at ₹328.30. Despite this, the consensus share price target for MOIL on February 3, 2026, was ₹397.67, suggesting a potential upside of 21.80% from its current price. The company's board also approved a joint venture with Madhya Pradesh State Mining Corporation.[psuconnect+4]
Blue Star and IDBI Bank Developments
Blue Star was among the stocks drawing investor attention around February 2. Forecasts for Blue Star's share price for February 2026 varied, with one projection suggesting a target of ₹2,877.54, while a consensus estimate on February 2, 2026, indicated a target of ₹1,892.00, representing a 2.93% upside from its last price of ₹1,838.20. The company also announced the resignation of Venkata Rao Ponnada as Executive Director for Projects, Solutions & International, effective February 28, 2026.[angelone+2]
IDBI Bank's strategic disinvestment process entered a crucial phase, with the government inviting technical and financial bids. The deadline for submitting financial bids was set for the first week of February 2026. The government and Life Insurance Corporation of India (LIC) aim to sell a combined 60.7% stake in the lender. At current valuations, the sale of the government's 30.48% stake alone could generate approximately ₹37,000 crore. The divestment is targeted for completion by March 2026.[marketscreener+5]
Broader Market Outlook
The Indian stock market was expected to remain volatile in the week of February 2 to 6, 2026, as investors continued to assess the impact of Budget 2026 and anticipated the Reserve Bank of India's Monetary Policy Committee meeting. While the initial reaction to the budget on February 1 saw benchmark indices decline sharply due to the STT hike, markets showed some recovery on February 2. The Sensex gained 536 points and the Nifty rose 133 points.[goodreturns+3]
A significant India-U.S. trade deal was signed on February 3, 2026, with Washington reducing tariffs on Indian goods to 18% from 25%. This agreement is expected to boost export-heavy sectors like textiles, apparel, and seafood, and attract foreign institutional investors, potentially providing a strong positive stimulus for the Indian economy in 2026.[equitymaster+2]
