Dhiraj Relli on Budget 2026: Fine Print Over Flash, Markets Likely to Look Past Knee-Jerk Sell-Off 

Mumbai, February 1, 2026: Soon after the announcement of the Union Budget 2026-27, Dhiraj Relli, Managing Director and CEO of HDFC Securities, stated that the Budget should be regarded in terms of consistency and long-term fundamentals rather than immediate market disappointment.  

Speaking on the Business Today TV market closing show, Relli said that although the general course of policy did not alter, the sell-off was a transient reaction to specific statements. 

The Nifty slipped nearly 2% during the session to fall below the 24,800 mark, while the Bank Nifty declined over 1,100 points, dragged down by heavy selling in PSU banks and capital-market stocks. Commenting on the sharp reaction, Relli said the Budget was “more nuanced and fine-print oriented rather than one driven by big-bang reforms.” 

Capex Continuity, But No Big-Bang Reforms 

Relli described Budget 2026 as a “nuanced and fine-print oriented” exercise, rather than one driven by sweeping reforms. He pointed out that the government’s sustained focus on capital expenditure continues to be a positive for the economy, particularly for a country with a significant infrastructure deficit. 

According to him, public capex plays a critical role not only in improving infrastructure but also in supporting employment generation and medium-term growth. “India remains an infrastructure-deficient country, and continued capex has its own repercussions on employment and growth,” Relli observed, adding that expectations had perhaps run ahead of deliverables. 

STT Increase Weighs on Near-Term Market Reaction 

Relli acknowledged that the increase in securities transaction tax on futures and options emerged as a key overhang for markets on Budget Day. He said the move acted as a dampener, particularly for traders and market participants active in derivatives. 

However, he characterised the sharp fall in indices as a knee-jerk reaction, suggesting that such responses typically moderate once markets digest the finer details of policy measures.  

“The STT increase in F&O has been a dampener, but this looks more like a knee-jerk reaction,” he said, noting that markets often move past such shocks within a few sessions. 

Investor Strategy: Refocus on Earnings Visibility 

For retail investors navigating post-Budget volatility, Relli advised revisiting portfolio allocations and aligning them with sectors that offer stronger earnings growth. He highlighted the BFSI space as one area with long-term potential, even though banking and capital-market stocks witnessed selling pressure on Budget Day.  

He also noted that policy continuity and earlier tax measures could gradually support consumption-linked sectors as demand conditions improve in the next fiscal year.