Budget 2026 Bank Nifty traders watch every headline nervously, Markets trade Sunday Feb 1, STT rollback demands grow louder, LTCG tax relief hopes rise. FII selling adds pressure
Smart Disha breaks down confirmed expectations, You get honest impact analysis. Practical rules for option sellers. No speculation. Just facts for working professionals
Budget 2026 Confirmed Timeline
Finance Minister Nirmala Sitharaman presents ninth consecutive Budget. Sunday Feb 1 trading confirmed by BSE/NSE. Standard 9 AM-3:30 PM hours apply. Markets factor expectations early. Gap moves expected at open
Key focus areas emerge from broker reports: fiscal consolidation, capex continuity, tax simplification demands
STT Changes: Option Sellers’ Biggest Hope
Current Pain Points:
- Option STT doubled to 0.1% premium (from 0.0625%)
- Futures STT rose to 0.02% traded value
- Premium compression hit 10-15%
- Theta decay effectiveness reduced
Budget 2026 Demands:
- STT rollback to pre 2025 levels
- Differentiate cash equity vs derivatives
- Lower futures STT to 0.01%
- Brokerages cite high-frequency trade impact
Option Seller Impact: Rollback expands premiums immediately. Status quo crushes profitability further
LTCG/STCG Tax Expectations
Current Rates:
- LTCG: 12.5% (up from 10%)
- STCG: 20% (up from 15%)
- ₹1.25 lakh LTCG exemption
Market Demands:
- Raise LTCG exemption to ₹3-5 lakh
- Standardize “long-term” definition to 12 months
- Allow capital losses set-off across heads
- Crypto tax clarity
Bank Nifty Effect: Tax relief boosts retail participation. Banking stocks benefit from credit growth
Fiscal Policy And Banking Sector Impact
Expected Announcements:
- Fiscal deficit target below 4.5%
- Capex steady at ₹11 lakh crore
- Infra risk fund ₹25,000 crore
- MSME credit guarantee expansion
- Home loan deduction to ₹4 lakh
PSU Banks Win: Infra financing mandates flow to SBI, PNB
Private Banks Mixed: Retail credit growth accelerates. Corporate NPA risks remain
Bank Nifty support at 59,200-59,800. Resistance 60,450-61,000
5 Budget Scenarios For Traders
| Scenario | Probability | Bank Nifty Move | Option Seller Impact |
| Fiscal Hawk (deficit <4.5%) | 40% | +400-600 pts | Premiums expand |
| Populist Tax Cuts | 25% | ±800 pts volatile | Straddles bleed |
| Infra Push Heavy | 20% | PSU banks +8% | Calls profitable |
| STT Relief Granted | 10% | Derivatives rally | Best case |
| Negative Surprise | 5% | -600 pts gap down | Puts expire ITM |
Historical Bank Nifty Budget Reactions
| Year | Budget Day Gap | 1 Week Later | Key Trigger |
| 2025 | +450 pts | -200 pts | Capex hike |
| 2024 | -320 pts | +600 pts | Tax relief |
| 2023 | +280 pts | Flat | Infra spend |
Pattern: 65% gap moves reverse within 7 days. Mean reversion creates opportunities
Bank Nifty Technical Setup Now
Immediate Levels (Jan 19):
- Resistance: 60,450 / 61,000
- Support: 59,800 / 59,500 / 59,200
- Relative strength vs Nifty
Budget week volatility expected higher. Institutional buying at supports confirmed
FAQ
Q1: Is Sunday Feb 1 trading confirmed for Budget 2026?
Yes. BSE and NSE confirm standard Sunday trading hours (9:00 AM – 3:30 PM). Expect gap moves at 9:15 AM open due to pre budget positioning. ClearTax Budget 2026 Date
Q2: Will STT rollback happen in Budget 2026?
30-40% probability. Brokerages and FICCI lobby heavily for derivatives STT reduction from 0.1% to pre-2025 levels. Revenue vs market volume debate continues. Moneycontrol STT Expectations
Q3: Is Bank Nifty safer than Nifty during Budget volatility?
Yes. Policy sensitivity creates clearer directional trends for banking stocks despite higher volatility. PSU banks benefit from infra financing mandates. Business Today Budget Impact
Q4: Will LTCG exemption limit increase in Budget 2026?
₹3 lakh demanded by ICAI/FICCI. Realistic outcome ₹1.25-2 lakh hike. Rate likely stays at 12.5% per expert consensus. Motilal Oswal LTCG Analysis
Q5: What fiscal deficit target expected for FY26?
Government targets below 4.5% of GDP. Capex maintained at ₹11 lakh crore. Infra push continues with MSME credit guarantees. 5Paisa Budget Expectations
