Any shares purchased on January 30 will not be eligible for sale on February 1, even though a special trading session will be held for the Budget announcement. Similarly, stocks bought on February 1 cannot be offloaded the following day on February 2 because settlement processes will remain unavailable.
A settlement holiday refers to a trading day when exchanges operate normally, but the back-end transfer of funds and securities does not occur. This happens because clearing corporations, banks, and depositories such as NSDL and CDSL remain closed, preventing the completion of trade settlements even though buying and selling on NSE and BSE continue as usual.
In a circular issued earlier this month, NSE confirmed that trading will proceed on February 1, 2026, to coincide with the Union Budget presentation. The exchange stated that the session will follow regular market hours, running from 9:15 am to 3:30 pm.
Brokerages argue that Finance Minister Nirmala Sitharaman is likely to stick to the fiscal consolidation roadmap while prioritising defence-led capital expenditure and selective consumption support measures.
International brokerage Jefferies expects the government to set the FY27 fiscal deficit at close to 4.2% of GDP, indicating a more gradual consolidation path of about 15–20 basis points each year between FY27 and FY31. The brokerage suggests this approach would reflect a calibrated effort to balance fiscal discipline with growth priorities.
It added that the Centre could alternatively maintain the deficit at around 4.4%, signalling a preference for supporting near-term economic expansion. While such a stance may be favourable for growth and equity markets, it could put upward pressure on bond yields. India’s debt-to-GDP ratio, which remains higher than pre-pandemic levels, is projected to decline by roughly 5 percentage points by FY31. Meanwhile, tax revenue growth for FY27 is estimated at about 8%, marking the third consecutive year of sub-10% expansion.Also read: Jefferies’ Chris Wood cuts India weightage in portfolio. Here’s why
Jefferies also expects a sizable surplus transfer from the Reserve Bank of India to provide fiscal support. The brokerage estimates that the RBI’s dividend for FY27 could increase by 10–15% to around Rs 3 trillion, supported by rupee depreciation. This inflow is likely to help offset subdued tax growth and assist the government in meeting its fiscal deficit target.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)