Union Budget 2026 has created a unique trading situation for stock market investors, especially those active around January 30, February 1, and February 2. Even though equity markets will remain open for trading on Budget Day, certain shares bought on these dates cannot be sold immediately. This has led to confusion among retail investors and traders.
January 30, 2026, is a regular trading day, but February 1, 2026, falls on a Sunday when the Union Budget 2026 will be presented. To facilitate Budget Day trading, stock exchanges will remain open. However, February 1 has been declared a settlement holiday, which changes how trades are processed.
Shares purchased on January 30 cannot be squared off or sold on February 1, even though trading is allowed on the NSE and BSE. Similarly, shares bought on February 1 cannot be sold on February 2. This restriction is not due to trading rules but because of how settlements work in the stock market.
A settlement holiday is a day when the market is open for buying and selling, but the post-trade settlement systems remain closed. While investors can place trades as usual on the exchange, the actual transfer of shares and funds does not take place. This happens because banks, clearing corporations, and depositories are shut for settlement-related operations.
