Given the constraints, the budget appears well balanced, says BSE CEO S Ramamurthy

In terms of the market impact, Ramamurthy believes that the market sentiment appeared to be changing as the day progressed.

The budget announcement related to the hike in LTCG, STCG and STT rates aligns with the government’s strategy of managing market behaviour and both, prices and volumes, will stabilise over time, says BSE MD & CEO Sundararaman Ramamurthy.

“People do not want a frenzied scene. People should think what they are doing and have an understanding of what they are doing,” he said.

On the impact on liquidity from announcements related to STT and capital gains, Ramamurthy said, “If you look at any cost which is imposed on the market, the immediate impact it has is on the bid assessment. These costs influence the bid-ask spread, a crucial factor in market transactions”.

This results in a decrease in transaction volume, he said. In terms of the overall budget, Ramamurthy believes that the government has done a balancing act.

The budget's overall impact, he says, will always be a mix of positives and negatives. “It is a balancing act,” he said citing examples such as tax simplification, SME encouragement, and capital formation as beneficial, alongside employment generation and skill development missions.

In terms of the market impact, Ramamurthy believes that the market sentiment appeared to be changing as the day progressed. “It appears that the market sentiment is changing, that's why the market is recovering," he told Moneycontrol.

Over time, he added, as more people understand the market dynamics, prices stabilize and the volumes return to normal levels.

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