10 C
New Delhi
Sunday 15 December 2019
Economy Budget belies market hopes

Budget belies market hopes

Mumbai: Stocks went into a tailspin today after the government imposed capital gains tax on equities and said it will overshoot its fiscal deficit target, but clawed back most of the lost ground after domestic institutions stepped up buying.

The 30-share Sensex plunged over 460 points in afternoon trade after Finance Minister Arun Jaitley announced long-term capital gains tax of 10% on stock market gains exceeding Rs 1 lakh.

It finally ended lower by 58.36 points at 35,906.66, while the broader Nifty shed 10.80 points to 11,016.90.

Sentiment also took a hit after the Budget raised the fiscal deficit target for 2017-18 to 3.5% of GDP as against 3.2% earlier.

The target for 2018-19 has been fixed at 3.3% as against the Fiscal Responsibility and Budget Management Act target of 3%.

Markets reeled under heavy selling pressure during Jaitley’s Budget speech in the Lok Sabha, but large-scale buying by domestic institutional investors towards the later part of the session cushioned the fall.

The BSE Sensex started on an optimistic note at 36,048.99 and advanced to 36,256.83 points during the presentation of the Budget but turned negative after Jaitley announced long-term capital gains tax, hitting a low of 35,501.74.

However, it bounced back to close at 35,906.66, still down by 58.36 points, or 0.16%.

The NSE Nifty too saw volatility and ended at 11,016.90, down 10.80 points, or 0.10%. It hovered between 11,117.35 and 10,878.80 during the day.

On the Budget day in 2017, the Sensex had gained 485.68 points, while Nifty had rallied 155.10 points.

The Sensex and Nifty have risen by 7,765.02 points, or 27.59% and 2,300.50 points, or 26.39%, respectively since the last Budget.

“Market saw volatility after the announcement of 10% long-term capital gains tax and breach in fiscal deficit target.

“Spiking government 10-year bond yield to 7.5% is also creating some caution among investors. Better forecasts for tax collection, rural spend, GDP growth and job creation are the positives of this budget which is expected to retain the sentiment in the market,” said Vinod Nair, Head of Research, Geojit Financial Services.

Higher infra spending and lowering of the corporate tax rate to 25% for businesses with a turnover of up to Rs 250 crore bolstered investor sentiment.

Shares of food processing companies were in demand after the Budget proposed doubling the allocation for the sector to Rs 1,400 crore for the next fiscal.

Major gainers were Sheetal Cool, Avanti Feeds, Godrej Agrovet and Freshtrop Fruits, rising up to 10%.

Agriculture-related stocks such as NACL Industries, PI Industries, Action Construction Equipment and Monsanto India also caught buyers’ fancy following the Budget’s focus on the rural economy.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 136.63 crore on a net basis while domestic institutional investors (DIIs) also bought equities to the tune of Rs 1,294.66 crore yesterday, provisional data showed.

Losers in the Sensex pack included ONGC, Sun Pharma, Dr Reddy’s, SBI, ICICI Bank, Reliance Industries, Tata Steel, Maruti Suzuki, Coal India, Tata Motors, Wipro, Axis Bank, NTPC, HDFC Bank, Axis Bank, Infosys and Bharti Airtel, declining up to 4.06%.

However, M&M, L&T, IndusInd Bank, Bajaj Auto, Asian Paints, ITC Ltd, Yes Bank, Hero MotoCorp, Kotak Bank, TCS, Power Grid, HDFC Ltd, Adani Ports and HUL finished with gains.

Among BSE sectoral indices, consumer durables fell the most by 1.78%, followed by healthcare 1.38%, oil & gas 1.28%, PSU 1.24%, realty 0.89%, bankex 0.64%, teck 0.20% and IT 0.09%.

Infrastructure, capital goods, auto, FMCG, metal and power ended in the positive zone.

In the broader markets, the mid-cap index fell 0.54%, while the small-cap index finished flat.

Coming to global markets, other Asian bourses ended mixed, tracking overnight losses on the Wall Street after the US Federal Reserve decided to keep interest rates unchanged.

European shares, however, were higher in their early deals.


Subscribe to our newsletter

You will get all our latest news and articles via email when you subscribe

The email despatches will be non-commercial in nature
Disputes, if any, subject to jurisdiction in New Delhi

Leave a Reply


Justice That Is Instant Is Travesty

But neither the state nor society can wash their hands off this social craving for settling scores in the name of doing justice to the victim

Karnataka Voters Punished INC, JDS Leaders

Even the BJP was not confident of the result even as their leaders kept saying for public consumption they were winning all the 15 seats

The United States Of The World

The United States, stereotyped as the land of plenty and plentiful guns, is still a destination of choice for people from across the world

प्याज़ के आँसू न रोएँ — महंगाई से किसान, उपभोक्ता दोनों को फ़ायदा

जिस अल्प मुद्रास्फीति की वजह से वे सरकार से बहुत खुश थे, उसी 1.38 प्रतिशत की खाद्यान्न मुद्रास्फीति के कारण किसानों को अपने पैदावार के लिए समुचित मूल्य नहीं मिल रहे थे

CAB Can Correct Wrongs Of NRC

… if the government can fix the inept bureaucracy and explain what happens to those marked as aliens, as the neighbours are not taking them back
- Advertisement -


Gurdwara discards 30 kg of cooked dal, realising it was ‘plastic’

The historic Gurudwara Bangla Sahib realised again the next day that the lentils were fake but got alerted before the dal was cooked

Prashant Kishor to campaign for AAP in Delhi election

Prashant Kishor has been successful as an election strategist in most campaigns: BJP at Centre 2014, JDU in Bihar 2015, INC in Punjab 2017

Service sector picks pace; trade deficit reduces

Service exports stood at $ 17.70 billion in October, registering a growth of 5.25%; trade deficit declined from $ 17.58 billion in 2018 to $ 12.12 billion

Sabarimala verdict review: SC snubs Fathima, Bindu

Ignoring the court decision to refer the Sabarimala review pleas to a 7-judge bench, the petitioners tried to get an order to enter the shrine immediately

Andhra Cabinet okays Disha Bill that dictates judiciary

While ordering the prosecution to complete its work in 14 days is permissible, Andhra Pradesh cannot set a time limit for the judiciary

You might also likeRELATED
Recommended to you

For fearless journalism

%d bloggers like this: