After an extremely volatile session, Indian indices ended the Budget session on a mixed note. Sensex closed 158 points, or 0.27 percent, higher at 59,708.08 while the Nifty ended at 17,616.30, down 46 points, or 0.26 percent.
This is the first time since 2018 that the Indian indices have moved less than one percent on the Budget day. In 2018, the markets ended flat, down just 0.1 percent on the budget day.
In 2022, the markets ended 1.4 percent higher, while in 2021, they surged 4.7 percent on Budget day. Meanwhile, in 2020, the markets fell 2.5 percent and in 2019, they shed 1.1 percent on their respective budget days.
As per data since 2014, the Indian markets have moved less than 1 percent on the Budget day in 5 of the past 10 sessions, including 2023. Despite the mixed trade, both Sensex and Nifty moved less than 1 percent in today's deals.
The Markets have fallen the most in 2020, down 2.5 percent and gained the most in 2021, up 4.7 percent. This was the highest gain since 2001 when the market moved up by over 4 percent on Budget day.
Overall, analysts as well as the markets were pretty pleased by today's Budget with the Nifty jumping 310 points and Sensex surging over 1,200 points in intra-day deals. However, in the latter half of today's session, markets pared gains as the focus shifted back to the US FOMC outcome and the Adani-Hindenburg episode.
"A well-tuned budget with a strong emphasis on consumption and capex has lifted optimism in the market; however, volatility sparked in the latter half as focus shifted back to the Adani saga and FOMC meeting. Life insurance players witnessed heavy selling as the budget pushed for the new tax regime, making insurance products less appealing as a tax-saving tool, said Vinod Nair, Head of Research at Geojit Financial Services.
"The market has not held up on the gains, as, again, Banks and Adani group stocks have come under pressure apart from a correction in insurance stocks due to changes in taxation laws,” noted B Gopkumar, MD & CEO, Axis Securities.
Among the key highlights of the Budget were an increase in the income tax rebate limit from ₹5 lakh to ₹7 lakh in the new tax regime and an increase in capital investment outlay for the third year in a row to ₹10 lakh crore. Despite the increase in investment outlay, the fiscal deficit for FY23 was maintained at 6.4 percent of the GDP, which was positive, as per experts.
"This is a terrific budget. I believe that the most important aspect of the budget is that it is preparing India for the future. Whether it is through participation, limiting carbon footprint, or ensuring the rural economy has the money and plans to reduce pressure on urban infrastructure. It's also a step in the right path toward making India Atmanirbhar and easing of doing business," said Sunil Damania, Chief Investment Officer, MarketsMojo.
"What is commendable, and I believe the biggest highlight of this budget, is that while increasing capital expenditure to ₹10 lakh crore, or 3.3% of GDP, the government has managed to keep the fiscal deficit at 5.9% for FY2024. Overall, the budget is excellent. The absence of negative news is a tremendous source of optimism. And the stock market has been ecstatic about this budget," he added.
“In keeping with its focus on inclusive growth, the Union Budget has hiked outlays on Infrastructure and Agriculture which in our view would have a force multiplier impact on the economy. The Budget has put more money in the hands of the people through relief from Income Tax which to our mind is a very positive step. Budget leaving Taxation on Capital Gains untouched is a big positive. We rate the Union Budget 9/10,” said S Ranganathan, Head of Research at LKP Securities.
|Year||Nifty Budget Day peformance (%)|