STT Hike Shocks Stock Market: Sensex, Nifty Crash After Budget Announcement

• Finance Minister Nirmala Sitharaman announced an increase in Securities Transaction Tax (STT) on Futures and Options (F&O) trading in the Union Budget 2026-27.
• The STT on sales in the futures segment rose from 0.02% to 0.05%, leading to an immediate stock market crash.
• The Sensex plummeted over 2000 points, and Nifty fell below 24700 points, indicating a significant budget effect.
• The tax hike will increase transaction costs for intraday and F&O traders, impacting market liquidity and forcing strategy changes for small investors.
• The government aims to curb speculative trading and encourage long-term investments, despite potential negative effects on retail investors and market volume.

Why It Matters: Increased STT on F&O trading in the budget led to a stock market crash, raising transaction costs and impacting liquidity.