Market Volatility Post-Budget 2026 and India-US Trade Deal
The Indian stock market has experienced significant turbulence despite two major positive developments: the pro-growth Union Budget 2026 and the landmark India-US trade deal announcement. Initially, the market failed to sustain gains as a hike in Securities Transaction Tax (STT) on Futures & Options triggered a massive selloff, overshadowing the budget's focus on growth and fiscal consolidation.
However, the market rebounded in subsequent sessions as concerns over STT subsided and attention shifted to the budget's substantial pro-growth measures. On February 3, indices jumped sharply following the India-US trade deal announcement, though trading turned muted the very next day.
With these major events now behind, market focus has decisively shifted back to fundamental factors including earnings growth, valuations, and sector-specific opportunities. Financial experts emphasize that investors should concentrate on selecting quality stocks across sectors rather than anticipating a broad-based market rally.
Expert Recommendations: 10 Stocks for Long-Term Investment
Rahul Ghose, Founder and CEO of Octanom Tech and Hedged.in, has identified ten stocks that present compelling long-term investment opportunities in the current market environment.
IDFC First Bank
Target Price: ₹105 – ₹110
Despite post-budget concerns about higher government borrowing affecting the banking sector, IDFC First Bank maintains strong fundamentals. Ghose highlights the bank's focus on retail franchise building and improving asset quality as key strengths. The stock is currently viewed as undervalued with a solid buy consensus from analysts.
ITC Limited
Target Price: ₹365 – ₹415
ITC faced a significant challenge with a sharp hike in cigarette taxes effective February 1, 2026, leading to immediate target price cuts by several brokerages. However, Ghose notes that the company's FMCG and Agri-business segments, growing at 11% year-over-year, provide a substantial safety net. Attractive valuations and high dividend yield make ITC a positive long-term prospect despite short-term volume risks.
Titan Company
Target Price: ₹5,000
Titan remains a top pick in the consumer discretionary space, benefiting from budget measures aimed at increasing disposable income and the ongoing shift toward organized jewellery players. The company stands to gain from tax reforms promoting a trust-based regime and stable consumer demand.
Tata Steel
Target Price: ₹210
The steel giant approaches its 52-week high, supported by the government's massive ₹15.48 lakh crore effective capital expenditure for FY26. Infrastructure demand is expected to keep steel prices firm despite global volatility, with the budget's record-high infrastructure and railway allocations providing significant positive momentum.
Axis Bank
Target Price: ₹1,520
With a 31% return over the past year and healthy Net Interest Margins (NIMs), Axis Bank is well-positioned to benefit from the budget's push for stable, long-term NRI capital, particularly through the raised PROI cap to 10%.
Biocon
Target Price: ₹420 – ₹450
Biocon emerges as a primary beneficiary of the ₹10,000 crore Biopharma Shakti outlay announced in Budget 2026. This scheme aims to develop India into a global hub for biologics and biosimilars, directly aligning with Biocon's core business operations.
Bharat Electronics (BEL)
Target Price: ₹500
The defence sector continues to receive favorable budget attention with a potential 20% increase in capital outlay to maintain operational readiness. BEL's robust order book and focus on indigenization have already attracted immediate institutional buying post-budget.
Mahindra and Mahindra (M&M)
Target Price: ₹4,220 – ₹4,520
M&M capitalizes on rural demand recovery and the budget's focus on agricultural mechanization. With a consensus buy rating and strong SUV pipeline, analysts see significant upside potential from current levels, further supported by rural economy and EV infrastructure initiatives.
ICICI Lombard
Target Price: ₹2,100
The insurance sector is poised for growth as the budget emphasizes building resilience and implementing structural reforms. ICICI Lombard's steady market share and healthy claims ratio make it a defensive yet growth-oriented investment choice.
Larsen and Toubro (L&T)
Target Price: ₹4,650
L&T remains the ultimate proxy for India's capital expenditure growth, boasting a massive order pipeline of ₹5.9 trillion. The budget's 4.2 times increase in capital expenditure since FY18 makes this infrastructure giant a must-have for portfolios focused on infrastructure development.
Investment Considerations and Market Outlook
The current market scenario presents a unique opportunity for long-term investors to build positions in fundamentally strong companies across diverse sectors. While short-term volatility may persist due to various macroeconomic factors, the underlying strength of India's economic growth story remains intact.
Investors should consider these expert recommendations within the context of their individual risk profiles and investment horizons. The shift toward quality stocks with strong fundamentals, rather than speculative bets, appears to be the prevailing wisdom among market analysts.
Disclaimer: This content is for educational purposes only. The views and recommendations expressed are those of the expert and not necessarily reflective of broader market consensus. Investors are advised to consult with certified financial experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary significantly.
