New Delhi, Feb 2 : Union Budget 2026â??27 marked a â??pragmatic approachâ?? with â??no fireworks,â?? laying the groundwork for a stable mediumâ??term growth environment, without focusing on immediate catalysts for equity markets, a report has said.

Global Brokerage Jefferies India in the report lauded the renewed emphasis on capital expenditure, particularly in defence, which was enabled by slower fiscal consolidation.

The brokerage also welcomed support for data centres and electronics component manufacturing as evidence of the governmentâ??s commitment to strengthen the domestic technology and manufacturing ecosystem.

Further, it said the government's strategy is clearly aligned with longâ??term export competitiveness, with export boost remaining the focus

Jefferies flagged the higher bond yields as a factor that could weigh on rateâ??sensitive sectors. According to the brokerage, the increase in securities transaction tax (STT) signalled the governmentâ??s discomfort with elevated derivatives trading volumes, however adding that the outcome could negatively impact capitalâ??markets stocks and brokerage companies.

The report said the Budget is positive for cement and defence firms because of higher infrastructure capex, and for electronics manufacturers to gain from higher allocations under the electronic manufacturing production linked incentive (PLI) scheme. It also noted potential gains for select realty and digitalâ??payments stocks due to a data centre-related trigger and incentives for digital payments in the Budget.

The report also highlighted a "large disinvestment budget" adding that the planned divestment of IDBI Bank could be completed in FY27.

Finance Minister Nirmala Sitharaman presented the Budget 2026-27 with total budgeted expenditure at Rs 53.47 lakh crore, with the fiscal deficit targeted at 4.3 per cent of GDP, an improvement from the 4.4 per cent revised estimate for 2025-26.

Capital expenditure rose by 9 per cent to reach Rs 12.2 lakh crore in 2026-27, marking one of the largest such allocations in recent times and equating to 4.4 per cent of GDP.

Among the biggest increases, defence secured Rs 7.85 lakh crore overall, of which Rs 2.31 lakh crore goes towards capital spending.

/IANS