The stock market indices opened slightly lower the day after Finance Minister Nirmala Sitharaman presented the Union Budget 2024. The NSE Nifty50 was down 15.90 points at 24,463.15, and the S&P BSE Sensex was down 48.96 points at 80,380.08 at 9:24 a.m. This slight dip in the market was reflected across all major market indices, which had a flat opening trading as well.
One of the key points in Sitharaman’s budget proposal was the removal of the indexation benefit for specific asset classes such as gold and real estate. This move had an immediate impact on the market, with Nifty real estate falling while most other sectoral indices rose. Experts predict that real estate stocks may experience a brief impact from this change as investors adjust to the new tax implications.
On the flip side, the government’s announcement regarding income taxes is expected to benefit stocks that cater to consumers. The increase in standard deduction and changes in tax slabs under the new tax regime are likely to make it more bearable for consumers. This could potentially boost consumer-focused stocks in the market.
The top five gainers on the Nifty50 following the budget announcement were ITC, Titan, Tata Motors, HDFCLife, and Tech Mahindra. Conversely, the largest losers were Britannia, Nestle India, HUL, Bajaj Finance, and Tata Consumer Products. This shift in stock performance indicates the market’s initial reaction to the budget proposals.
Dr. V K Vijayakumar, the chief investment strategist at Geojit Financial Services, highlighted the importance of focusing on stocks that can deliver superior returns in light of the changes in capital gains tax. He mentioned that FMCG stocks seem attractive from a valuation perspective in the current market climate. However, he advised against investing in shares like ITC and United Spirits.
Overall, the Budget was seen as a positive step towards strengthening the India Growth Story by emphasizing growth and financial stability. Despite concerns about potential increases in capital gains tax, the goal of fiscal consolidation in the Budget was viewed positively. Additionally, the removal of indexation benefits for real estate and gold is expected to make equity a more attractive asset class overall.
The higher tax on F&O trading was seen as a move to discourage excessive speculation in this segment, which was welcomed by experts. In conclusion, while the market initially reacted with a slight dip following the budget announcement, the overall sentiment was positive towards the government’s focus on growth and financial stability. Investors are advised to carefully consider their investment strategies in light of the new budget proposals.