Equity benchmarks Sensex and Nifty closed on a mixed note on Wednesday as euphoria over the Union Budget faded, with investors booking profits ahead of the Fed interest rate decision.
The 30-share BSE benchmark Sensex climbed 158.18 points, or 0.27%, to close at 59,708.08 as it pared most of the intra-day gains. During the day, it had gained 1,223.54 points, or 2%, to 60,773.44.
In contrast, the broader NSE Nifty closed at 17,616.30, down 45.85 points or 0.26%.
“A well-crafted budget with an emphasis on consumption and capex has fueled optimism in the market; however, volatility increased in the latter half as the focus shifted back. adani saga and FOMC meeting.
Vinod Nair, Head of Research, Geojit Financial Services, said, “Life insurance companies have seen heavy selling due to the new tax regime being pushed in the Budget, making insurance products less attractive as a tax-saving instrument.”
Dhiraj Relli, MD & CEO, HDFC Securities, said, “In the absence of any major unexpected negative and adherence to fiscal prudence, the stock markets have responded well to the provisions immediately.
He added that the market will now look at other triggers – US Fed meet outcome, RBI’s next MPC meeting and remaining Q3 corporate results.
“In short, I would call this budget prudent, progressive and pragmatic,” Mr. Reilly said.
From the Sensex pack, ITC, Tata Steel, ICICI Bank, Tata Consultancy Services, HDFC, HDFC Bank and Kotak Mahindra Bank were the major gainers.
On the other hand, Bajaj Finserv, State Bank of India, IndusInd Bank and Mahindra & Mahindra were the major laggards.
Sunil Damania, Chief Investment Officer, MarketsMojo said, “Overall, the Budget is excellent. The absence of negative news is a tremendous source of optimism. And the stock market is upbeat about this Budget.”
Finance Minister Nirmala Sitharaman changed the slab on Wednesday To provide some relief to the middle class by announcing no tax on annual income up to Rs 7 lakh under the new tax regime.
It also allowed standard deduction of ₹50,000 to taxpayers under the new regime, where assessees cannot claim deduction or exemption on their investments.
“The government’s relief on personal income tax by providing exemption up to Rs 7 lakh and changing the slab rate under the new income tax regime comes as a major boost for the Indian markets. Finance Minister did not tinker with capital gains, Which appeased the markets,” said Sanjay Moorjani, research analyst, SAMCO Securities.
Meanwhile, an overall positive trend in global markets also enthused investors.
Elsewhere in Asia, equity markets in Seoul, Tokyo, Shanghai and Hong Kong ended in positive territory.
Equities in Europe were trading in the green during the mid-session deals. Markets in the US closed with gains on Tuesday.
“India’s Budget 2023 has offered a multi-pronged approach. The 3 C’s that stand out are – capex growth, consumption boost, capital gains tax status. Considering the fact that there is hardly any room for fiscal expansion The FY24 fiscal deficit is pegged at 5.9% and is expected to see a progressive reduction till FY2026.
“Clearly a bulls-eye budget satisfies most sections of the society and certainly better than the market,” said Lakshmi Iyer, CEO-Investment Advisory, Kotak Investment Advisors Ltd.
Ms Sitharaman on Wednesday announced a 33% increase in capital expenditure for infrastructure development to ₹10 lakh crore for 2023-24, which would amount to 3.3% of GDP.
“A 33% increase in capital expenditure to ₹ 10 lakh crore, the highest ever, will go a long way in building roads, ports and airports – crucial to making India a credible investment destination. In railways ₹2.4 lakh crore investment. Commendable,” said Anand Rathi, Founder and Chairman, Anand Rathi Group.
Ms. Sitharaman on Wednesday Listed seven priorities of Union Budget 2023-24including infrastructure, green development, financial sector and youth power.
He said that four transformative opportunities can be harnessed in the Amrit Kaal to enhance economic empowerment.
Head of Research, LKP Securities S. “In keeping with its focus on inclusive growth, the Union Budget has increased the outlay on infrastructure and agriculture, which we think will have a multiplier effect on the economy,” Ranganathan said.
International oil benchmark Brent crude fell 0.05% to $85.42 a barrel.
Foreign institutional investors (FIIs) sold shares worth a net Rs 5,439.64 crore on Tuesday, according to exchange data.