Indian equities took a notable downturn on Budget Day, with investors reacting sharply to the increase in securities transaction tax (STT) on futures and options — a move that weighed on trading volumes and sentiment. Despite the volatility, analysts say the broader Union Budget 2026 still holds structural positives around infrastructure spending and policy certainty, which could support earnings visibility in the medium term.

Shares in the spotlight included defence and engineering names like BEL (Bharat Electronics) and HAL (Hindustan Aeronautics Ltd) — likely beneficiaries of an 18 % jump in capital outlay for 2026-27 that could bolster order books. Consumer and diversified firms such as ITC were also in focus after changes in excise duty pushed up cigarette prices, impacting trading sentiment. Hero MotoCorp drew attention after reporting strong January dispatch growth, reflecting healthy retail demand.

Realty and digital infrastructure plays found support too, with Anant Raj climbing as data centre-linked tax incentives encouraged investor interest. Meanwhile, Adani Green clarified it is not a party in the US SEC civil case affecting its directors, addressing market concerns.

In this mixed market backdrop, near-term volatility may persist, but many strategists see long-term opportunities in sectors tied to budget-driven capex, defence and digital infrastructure growth.