BSE, NSE Trading After Union Budget 2026 Announcement; Know Rules To Buy, Sell Stocks on 1st February, Sunday

Investors trading today after the Union Budget presentation on February 1, 2026, need to exercise extra caution as a settlement holiday over the weekend is set to temporarily restrict the ability to sell recently bought shares. While equity markets will remain open for trading as usual, the back-end settlement system shutdown will affect delivery-based trades, particularly for short-term and Budget-day strategies.

Trading After Union Budget 2026 Announcement; Know Rules To Buy or Sell Stocks on 1st February, Sunday

The complication arises because January 31, 2026, falls on a Sunday, a day when settlement systems do not operate. As a result, investors executing quick buy-and-sell trades around the Union Budget announcement may find themselves unable to exit positions on expected dates, even though the exchanges continue to function normally.

Equity Traders Beware: Settlement Holiday Restricts Selling on Budget Day

Any equities purchased on January 30, 2026, will not be available for sale on February 1. Although a special trading session will be held on Union Budget Day, the settlement of shares bought on January 30 will not be completed due to the intervening settlement holiday. Consequently, brokers will block delivery-based selling of those holdings, limiting flexibility for traders looking to react swiftly to Budget announcements.

Similarly, trades executed on Union Budget Day itself will also face a temporary restriction. Shares bought on February 1, 2026, cannot be sold on February 2, as the settlement cycle will still be pending. Normal settlement and transfer of funds and securities will resume only after clearing corporations, banks, and depositories complete the required processes once operations reopen.

What Is a Settlement Holiday?

A settlement holiday is a day when stock exchanges such as the NSE and BSE remain open for trading, but post-trade settlement activities are suspended. On these days, clearing corporations, banks, and depositories like NSDL and CDSL remain closed. While buy and sell orders continue to match on the exchanges, the actual transfer of shares and funds does not take place, preventing trades from being settled.

Because Sunday is a settlement holiday, shares bought on January 30 cannot be squared off on February 1, even though markets will remain open due to the Union Budget 2026 announcement. Likewise, stocks purchased on February 1 cannot be sold on February 2, impacting traders who rely on short holding periods.

Stock Market Crashed After FM Nirmala Sitharaman's Budget 2026 Announcements; Sensex Down 800 Pts, Nifty At 25,000

Markets witnessed sharp losses on Budget Day as Finance Minister Nirmala Sitharaman announced an increase in the Securities Transaction Tax on futures and options. The move triggered widespread selling across sectors, particularly in derivatives-heavy stocks. The BSE Sensex tumbled more than 800 points, while the NSE Nifty slipped below the 25,050 mark, reflecting heightened nervousness among investors.

Metal, commodity, and financial stocks led the decline, as higher trading costs in the derivatives segment weighed on sentiment. Retail traders and market participants reacted swiftly, with profit booking intensifying amid caution over further Budget-related announcements. Market breadth remained weak, with most sectoral indices ending in the red.

Why Stock Market is Down on Budget Day?

"The stock market has reacted negatively to the STT hike on F&O (up to 0.05%) and the new tax treatment for buybacks, triggering a sharp intraday sell-off in the Nifty and Sensex. These measures raise transaction costs and change the near-term economics for both traders and companies relying on buybacks as a capital-return tool," Prasenjit Paul, Equity Research Analyst at Paul Asset & Fund Manager at 129 Wealth Fund.

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