Is the stock market open on Sunday, Feb 1, 2026? Which sectors will boom in Budget 2026? Discover the top 10 stocks to watch, sector-wise analysis (Railways, Defence, Green Energy), and expert strategies for the pre-budget rally. Read the full Nexyraa guide now.
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Introduction: The Countdown Begins
As we approach February 1, 2026, the pulse of the Indian stock market is racing. The Union Budget 2026 is not just another financial statement; it is a pivotal event that will define the trajectory of India’s economic engine for the next fiscal year.
This year is unique. In a rare move, the stock markets (NSE and BSE) will remain open on Sunday, February 1, 2026, for a special trading session during the Budget presentation. This signals high volatility and massive opportunities for traders and investors alike.
At Nexyraa, we have analyzed historical trends, market sentiment, and government focus areas to bring you this comprehensive guide. Whether you are a seasoned trader or a student of finance, this breakdown will help you navigate the 2026 Budget volatility.
1. Why is Budget 2026 Crucial for Investors?
The 2026 Budget comes at a time when India is solidifying its position as a global manufacturing hub. The “China+1” strategy is in full swing, and domestic consumption is rebounding.
Key Expectations:
- Fiscal Deficit: The government is expected to stick to a fiscal glide path, targeting a deficit of around 4.5% of GDP. This shows fiscal discipline, which is positive for Foreign Institutional Investors (FIIs).
- Capex Push: Expect another record-breaking allocation for Capital Expenditure (Capex), likely exceeding ₹12 Lakh Crore, with a laser focus on Infrastructure, Railways, and Defence.
- Tax Relief: There are strong rumors of changes in the New Tax Regime to put more disposable income in the hands of the middle class, which could trigger a rally in FMCG and Consumption stocks.
Note for Investors: Volatility will be at its peak. The India VIX (Volatility Index) typically spikes by 15-20% in the week leading up to the budget.
2. Sector-Wise Analysis: Where is the “Smart Money” Going?
Based on the viral trends of January 2026, here are the sectors that are likely to see the biggest fireworks.
A. Railways: The Engine of Growth
The Railway sector has been the darling of the market for the last two years. For Budget 2026, the expectation is a massive allocation for:
- Kavach System: Nationwide implementation of the anti-collision system.
- New Vande Bharat Trains: Announcement of 500+ new Vande Bharat sleeper trains.
- Track Modernization: Doubling of tracks in high-density corridors.
Stocks to Watch: RVNL, IRFC, Titagarh Rail Systems. (See detailed analysis on Moneycontrol Railway News)
B. Defence: Self-Reliance (Atmanirbhar Bharat)
With geopolitical tensions rising globally, India’s focus on indigenization is non-negotiable. The government is expected to ban the import of more weapons lists, directly benefiting domestic manufacturers.
- Export Focus: Companies like HAL and BEL are securing orders from friendly foreign nations.
- Drone Technology: Special incentives for drone manufacturers are expected.
Stocks to Watch: HAL, Bharat Electronics (BEL), Mazagon Dock.
C. Green Energy & Power
The target of 500 GW of renewable energy by 2030 requires massive funding. Budget 2026 might introduce:
- PLI Schemes: For battery storage and Green Hydrogen.
- Solar Rooftop Scheme: Expansion of the “Suryodaya Yojana”.
Stocks to Watch: Tata Power, IREDA, Suzlon Energy.
D. Infrastructure & Real Estate
“Sadak, Bijli, Paani” remains the core theme. The allocation for NHAI (National Highways Authority of India) is expected to increase by 15%.
- Affordable Housing: Revival of the PMAY scheme with higher subsidies could boost housing finance companies.
Stocks to Watch: L&T, IRB Infra, HUDCO.
3. Top 10 Stocks to Watch Before February 1, 2026
Disclaimer: This is for educational purposes only. Please consult your financial advisor before investing.
- State Bank of India (SBI): The biggest beneficiary of the capex cycle and credit growth. Undervalued compared to private peers.
- Larsen & Toubro (L&T): The proxy for India’s infrastructure story. Order book is at an all-time high.
- HDFC Bank: After recent consolidation, it is poised for a breakout on improved margins.
- Tata Motors: With the EV leadership and strong JLR numbers, it remains a top pick.
- NTPC: A perfect blend of thermal reliability and green energy transition.
- Coal India: High dividend yield and rising power demand make it a safe defensive bet.
- HAL (Hindustan Aeronautics Ltd): Monopoly in fighter jet manufacturing.
- Praj Industries: Leader in ethanol blending; a direct beneficiary of Green Energy policies.
- ITC: If there are no negative surprises on cigarette taxes, ITC will rally on FMCG volume growth.
- IRFC: Financing the railway boom. As long as the government spends on rail, IRFC grows.
4. The “Sell on News” Strategy
A common phenomenon in the stock market is “Buy the Rumor, Sell the News.”
- Scenario: If Railway stocks rally 20% before the budget, they might crash on Budget Day even if the news is good, because the profit booking kicks in.
- Nexyraa Strategy: If you are sitting on heavy profits in PSU stocks, consider booking partial profits on January 30th (Friday), before the Sunday session.
“The market hates uncertainty. Once the Budget is out, the uncertainty ends, and the real trend begins.”
5. Important FAQs for Budget Day 2026
Q1: Will the stock market be open on Sunday, Feb 1? Ans: Yes. The NSE and BSE have notified a special trading session. The market timings will likely be normal (9:15 AM to 3:30 PM), but confirm with your broker. (Source: NSE India Circulars)
Q2: What happens to F&O positions? Ans: It will be a normal trading day. Intraday volatility will be extreme. Option premiums (IV) will be very high, so Option Buyers should be cautious of “IV Crush” after the speech ends.
Q3: Which sector is safest? Ans: FMCG and Pharma are generally defensive sectors. If the budget disappoints, money flows into these safe havens.
Conclusion
The Union Budget 2026 is a mega-event for the Indian economy. While traders look for quick gains, long-term investors should use any dip on Budget Day to accumulate quality stocks in Infrastructure, Banking, and Green Energy.
At Nexyraa, we believe that India’s structural growth story is intact. The Budget is just a pitstop in the journey to a $5 Trillion economy.
Stay tuned to Nexyraa.com for live updates on February 1, 2026.
External Resources:
- NSE India Official Site: www.nseindia.com
- Union Budget Official Site: www.indiabudget.gov.in
- Moneycontrol Budget News: www.moneycontrol.com/budget
