Market Macro First: Budget Shock, STT Hike and Volatility Ripples

Monday, February 2, kicked off with Indian markets on edge. The Union Budget 2026 surprised traders on multiple fronts, most notably with a sharp hike in Securities Transaction Tax (STT) for futures & options from 0.02% to 0.05%. That move alone sparked a strong risk-off reaction over the weekend, with benchmark indices slumping in the pre-market mood after Sunday’s Budget announcement. The Nifty50 had earlier tumbled close to the 24,800 mark on heavy selling pressure, while the Sensex slid around 1,500–2,000 points in early session trading. That set the tone for a jittery start to the week.

In this unsettled backdrop, several stocks and sectors are drawing extra attention as traders look for both catalysts and risks that could dominate flows on Monday’s session.

Capital Markets & Brokerage: BSE and Groww in Focus

The very stocks tied to how market access and retail participation are priced, BSE and Groww, are under the spotlight. The STT surge, along with other budget tweaks, has already created higher cost dynamics for derivatives trading. Early commentary from brokerage houses suggests this could weigh on turnover and volumes across futures & options markets, particularly affecting firms whose revenue is significantly linked to trade activity. Analysts flagged that BSE’s average daily turnover might shrink by nearly 5%, with Groww potentially feeling similar earnings pressure given its exposure to retail derivatives trades.

For active traders tracking the market microstructure, anything that changes friction costs, like STT, is more than a footnote. It can alter positioning flows, especially at key index inflection points.

Banking & PSU Spotlight: IDBI Bank and Sector Moves

IDBI Bank headlines among financials this Monday. The strategic divestment process has reportedly progressed into its third phase, with both technical and financial bids already in the ring. DIPAM officials indicate clearer contours of the deal could emerge before the end of FY26, driving sentiment and volume in the stock.

Elsewhere among PSU banks, weakness has been broad—Bank of India and Indian Bank saw ~5–6% dips recently, with Bank of Maharashtra and Bank of Baroda also under pressure. That’s partly because the Budget outlined a record gross market borrowing of ₹17.2 lakh crore for FY27, which markets interpret as a potential drag on liquidity and net interest margins in the near term.

The PSU banking universe rarely moves in a vacuum macro tweaks to fiscal math tend to reflect in bond yields, credit spreads, and ultimately bank valuation multiples.

MOIL: Mining Growth in Play

MOIL has quietly made headlines with a board approval for a joint venture with Madhya Pradesh State Mining Corporation. This isn’t incremental; it’s a strategic expansion of manganese ore operations in one of India’s resource-rich states. With manganese critical for steel and battery supply chains, this JV could have both operational and narrative implications for the stock.

That said, MOIL isn’t immune to volatility. Cyclical miners see outsized moves when broader equity sentiment flips, so watch volume and relative strength here as markets sort through macro risks.

Blue Star: Data Security Incident

One of the more unusual catalysts this week comes from Blue Star, which reported unauthorized access to its product installation data. The company says it has restricted access post-detection and is working with cybersecurity specialists to assess impact and root cause.

Tech-linked operational risk headlines like this often trigger knee-jerk reactions among institutional allocators, especially in stocks outside the deep-value bracket, where governance and security execution narratives can materially affect earnings perception.

Wider Watchlist: Beyond the Headliners

While the names above are in sharper focus, the broader market backdrop points to several others catching attention:

• Hero MotoCorp—strong January sales growth is adding life to the auto pack narrative.

• Biopharma and related names—budget commentary on biologics and manufacturing hubs pushed some names modestly higher.

• Banking stocks overall (SBI, Bank of Baroda, and Indian Bank) are showing sector rotation dynamics post Budget.

• Q3 results season—a slew of companies across sectors is announcing December-quarter results this week, meaning price action could be driven as much by fundamentals as by rate and tax sentiment.

What Traders Are Digesting on Feb 2

In times like this, markets reflect a mix of policy risk repricing, fundamental developments, and event-driven headlines. Stocks tied to derivatives volumes (Groww, BSE), banks undergoing structural changes (IDBI), cyclicals with growth catalysts (MOIL), and even security headlines (Blue Star) are all weaving into a patchwork of trade ideas.

For the rest of the session today, watch how volatility indexes, flows in mid-caps, and downstream reactions to fiscal tweaks shape price action because a Budget week often feels less about discrete winners or losers and more about how quickly markets reframe expectations.