Closing Bell: LTCG, STCG hike sinks Sensex, Nifty on Budget day; realty drags, FMCG, IT shine

Indian benchmark indices ended marginally lower in the volatile session on July 23. At close, the Sensex was down 73.04 points or 0.09 percent at 80,429.04, and the Nifty was down 30.30 points or 0.12 percent at 24,479.

We wrap up today's edition of the Moneycontrol live market blog, and will be back tomorrow morning with all the latest updates and alerts. Please visit https://www.moneycontrol.com/markets/global-indices for all the global market action.

The budget is comprehensive and has managed to achieve the seemingly impossible trinity of fiscal prudence, investment, and growth momentum.

Under the new tax regime, the standard deduction has been raised from Rs.50000 to RS.75000, and the NPS has seen an increase from 10% to 14% for the employees from companies is positive.

Taking into account the demographic situation of our country, prioritizing job creation and providing incentives to manufacturing units will undoubtedly fuel the country's growth. Moreover, various small-scale initiatives would bolster consumption.

Maintaining the capital expenditure allocation and lowering fiscal consolidation to 4.90% by FY25 is positive for the economy and would lead to upgrades from rating agencies.

While the indexation benefit for the real estate sector has been eliminated, the reduction of the tax to 12.50% from 20% is positive. The hikes in long-term and short-term capital gains tax are unexpected and the market would adjust to that

Overall we remain optimistic about the long-term prospects for the Indian economy and capital markets.

The government is expected to focus on additional social welfare expenditure, capital expenditure, and more crucially, reducing the fiscal deficit on the back of a robust economy and substantial contributions from the Reserve Bank of India and public financial institutions, says Madan Sabhnavis, Chief Economist at Bank of Baroda.

In an exclusive conversation with Moneycontrol, Sabhnavis said that the budget will likely aim to bring the fiscal deficit closer to 5 percent, paving the way for a 4.5 percent target next year, as stated in the Fiscal Responsibility and Budget Management (FRBM) Act. Read More

Budget 2024 signals a strong commitment to India's macroeconomic story. It sets the fiscal deficit target for FY25 at 4.9 percent of GDP, lower than market expectations. In absolute terms, this amounts to Rs 16.15 lakh crore. For FY26, it aims to bring the deficit below 4.5 percent. These targets look credible.

The budget keeps the nominal GDP growth rate at 10.5 percent, same as was projected in February 2024. This is a realistic assumption, despite an 8 percent real growth in the second half of FY24 and RBI's FY25 growth projections at 7.2 percent. Extra revenues from RBI have been prudently used by increasing total expenditure only by ~ Rs 50,000 crore, while keeping capital expenditure constant and the balance being utilised in reducing the fiscal deficit. As the bulk of the increase in expenditure outlay is in the form of asset creation (houses/ roads etc), the budget is non-inflationary and would provide comfort to RBI on the inflation front. Read More

The Finance Minister's 2024-2025 budget strikes a careful balance between fostering economic growth and ensuring fiscal prudence. The budget emphasizes support for MSMEs, youth employment & skilling, and relief for the middle class, while maintaining a strong commitment to infrastructure development. Tax reforms and financial sector improvements are also central, aiming to streamline the economic framework and boost overall economic performance. Although the initial market response to changes in securities transaction tax (STT) on futures and options, along with adjustments in short-term and long-term capital gains taxes, was mixed, the market has since shown resilience. Investors are demonstrating confidence in the long-term outlook, using the budget as an opportunity to accumulate quality stocks. This optimism reflects a broader belief in the budget’s potential to drive sustainable market growth and economic stability.

The market reaction to the recent budget announcement signals an immediate response to the adjustments in capital gains taxes that investors had anticipated, confirming the government’s commitment to restraining speculative excesses while laying the foundation for sustainable growth. The increasing monthly SIP inflows and expanding mutual fund participation exemplify the developing trend of financialization of savings in India, forming a solid basis for future market resilience. Although the recent fiscal budget evoked an initial response, its impact was always likely to be restricted. The revised deficit target of 4.9% of GDP indicates fiscally responsible policies, serving as a strong indicator of economic stability.

The budget's explicit focus on increasing employment through support for skill development measures and infrastructure signifies a holistic strategy to promote inclusive growth. The Prime Minister's strong commitment to Atmanirbhar Bharat, along with the clear prioritization of renewable energy and micro, small, and medium enterprises, underlines India's seriousness about sustainable development goals and reducing import dependency. If correctly implemented, these initiatives have the potential to boost economic resilience and solidify the banking sector's position, serving the broader objectives of recovery and growth in the medium run. The budget reflects the government’s economic vision of anchoring deficits, inflation & interest rate on one hand and broad basing the growth across capital goods and consumption to prepare India for stepping up 6.5% to 7.5% GDP to 7.5% - 8.5% over the next three years.

The first Budget of the new term of this government prioritises its core agenda of fiscal consolidation, makes a strong attempt to support employment generation and education for the youth, while embarking on the journey of simplifying India’s tax regime. The Budget also makes subtle shifts to boost consumption at the lower end of the income spectrum through breaks in personal income tax. Increase in LT/ST Capital gains though, is modestly negative at the margin though may not significantly change the return trajectory for long-term investors.

Nifty remains positive as the selling pressure has been absorbed from lower levels. Immediate support levels are at 24,400, 24,075, and 24,000, while resistance is expected at 24,600, 24,850, and 25,000. For Bank Nifty, the trend is also positive, with selling absorbed at lower levels. Support levels are at 51,350, 51,000, and 50,500, with resistance at 52,100, 52,500, and 52,750.

In terms of sector performance, the Media Sector and IT Index are anticipated to do well going forward, with a focus on IT stocks for potential buying opportunities at lower levels. Key support for the IT Index is at 39,000, with the next support near 38,700.

Zee Entertainment is expected to see increased buying near its major support range of 120-125. Notable IT stocks to watch include TCS, Persistent Systems, Coforge, and Mphasis.

There was a knee-jerk reaction during the Budget speech as Sensex plunged more than 1000 points after FM increased LTCG and STCG rates along with higher STT on F&O transactions, which had caught investors off guard. However, both key benchmark indices erased almost all of its losses to end marginally lower as the government's focus on lower fiscal deficit, increased spend on infrastructure and focus on rural spending helped calm the nerves of the traders.

Union Budget 2024-25 was better than expectations for bond markets. The market was surprised by drop in estimated fiscal deficit to 4.9% of GDP (from 5.1% of GDP in the interim budget). However, there was only marginal drop in gross / net borrowing numbers, which dented market sentiments. Overall the budget was positive as it stuck to fiscal consolidation and further projected to achieve 4.5% fiscal deficit in FY2026. With continuing passive inflows, post inclusion in JP Morgan EM Bond Index, and a tight fiscal budget, market yields should continue to soften, as long term investors get confidence from the continuing fiscal prudence.

Domestic investors had high expectations from the budget to increasing revenue and capital expenditure. However, the narrative is mixed, by curtailing expenditure while attaining fiscal prudence, which can limit further growth. During the year, the market has fairly factored in ongoing growth and trading at a high premium. To sustain that gap, corporate growth has to be maintained, which is experiencing a slowdown as per the ongoing Q1 result.

The budget underlines the government’s priority of inclusive growth with prudent fiscal practices. Fiscal deficit target has been set lower than market expectations at 4.9% of GDP for FY25. Fiscal math looks credible and is in line with the interim budget announcements, indicating that the government is utilising the income tax buoyancy in right areas.

The focus on building India’s human capital through various skilling programs with an aim to improve productivity and reap the benefits of the huge demographic dividend over the coming years is commendable.

Although the capex allocation is kept unchanged, the allocation of Rs 11.11 trillion is significant considering it has grown ~17% YoY from revised estimates of FY24. Government’s commitment towards transitioning to cleaner sources of energy and focus on manufacturing and MSMEs mark the progress pathway to Viksit Bharat.

Continuing her reformist agenda from previous tenure, the finance minister’s announcements on land digitisations, employment and skill development, taxes, and manufacturing are going to further strengthen the economy. The declining fiscal deficit highlights the fiscal discipline and prudence of the government. On this front, it is a good budget. Any continuity of policy in budget announcement is good.

One big negative is increased taxes on long-term capital gains, which is discouraging. Given the low penetration of financial assets, consistency of taxes always helps in the long run. The intention of change in slabs in the new tax regime is to spur consumption. The government is also making a clear indication that the new tax regime would be the preferred one going forward.

One good news for mutual fund investors is that Fund of Fund making investments of more than 65% in domestic equities will be treated at par with other mutual fund schemes as far tax treatment is concerned. This has removed an anomaly.

The budget strikes a decent and balanced approach, especially given the current coalition government dynamics. Allocations to Bihar and Andhra Pradesh are strategic investments that will likely generate significant revenue in the future. Increased FDI is expected to boost investment in India, while changes in the Insolvency and Bankruptcy Code (IBC) and the establishment of new tribunals will strengthen the banking sector.

The digitization of land records is a forward-thinking initiative that holds great promise.

The removal of indexation benefits might negatively impact investor returns, leading to a short-term bearish outlook for the sector.

The 25% increase in the Long-Term Capital Gains (LTCG) tax is manageable and not likely to deter investors significantly.

However, the increase in Short-Term Capital Gains (STCG) tax from 15% to 20% could have a more pronounced negative impact in the medium term.

Continuing her reformist agenda from previous tenure, the finance minister’s announcements on land digitisations, employment and skill development, taxes, and manufacturing are going to further strengthen the economy. The declining fiscal deficit highlights the fiscal discipline and prudence of the government. On this front, it is a good budget. Any continuity of policy in budget announcement is good.

One big negative is increased taxes on long-term capital gains, which is discouraging. Given the low penetration of financial assets, consistency of taxes always helps in the long run. The intention of change in slabs in the new tax regime is to spur consumption. The government is also making a clear indication that the new tax regime would be the preferred one going forward.

One good news for mutual fund investors is that Fund of Fund making investments of more than 65% in domestic equities will be treated at par with other mutual fund schemes as far tax treatment is concerned. This has removed an anomaly.

In the Budget, it was announced that Basic Custom Duty and AIDC on gold have been reduced, bringing the total from 15 percent to 6 percent. As a result, the price of gold reacted lower in MCX by more than Rs 3800 to Rs 68,900. The broad view remains volatile and weak as Comex gold stays below $2415.

The interest rate cut in the US will be keenly anticipated, now that Indian gold has become discounted, presenting a more favorable long-term buying opportunity for gold in Indian markets. Price range for Gold shifts to 67500-69500 range.

The budget announcement was largely as anticipated, emphasizing fiscal consolidation with a target fiscal deficit of 4.9% for FY 24-25. It introduces measures aimed at boosting youth employment and skills development and has allocated a significant Rs 1.52 lakh crore for agricultural and allied sectors.

Infrastructure continues to be a focus area with 3.4% of GDP (totalling 11.11 lakh crore) earmarked for this critical sector. Additionally, new schemes and measures have been introduced to bolster manufacturing, services, and the energy sector. The budget also includes supplementary allocations to Bihar and Andhra Pradesh to boost capital investment. The middle class received marginal relief with an increased standard deduction of Rs 75,000 for salaried individuals under the new regime and a higher exemption limit on LTCG raised from Rs 1 lakh to Rs 1.25 lakh.

Reductions in customs duties on gold and silver are anticipated to benefit domestic companies by potentially lowering the prices of these precious metals. Initial market response has been negative due to the increase in LTCG tax on listed equities to 12.5% from 10%, an increase in STCG to 20% from 15%, and higher STT rates on Futures & Options at 0.02% and 0.1%, respectively.

Shankar Sharma, founder of GQuant, said he was unhappy with the recent hike in capital gains tax announced in the Budget. In an interview to Moneycontrol, Sharma, a seasoned market veteran, criticised the increase as unnecessary and detrimental to investor sentiment.

"I'm not happy.," he said. "We don't have an increase in the capex budget, but we have an increase in my tax budget. A 20 percent increase in tax for long-term and a third increase in short-term gains are significant. This kind of tweaking isn't required," he added.

Sharma pointed out that the tax increases come after a period where equity market investors already faced challenges. "From 2014 till March 2020, the government delivered risk-adjusted returns lower than fixed deposits. The market was hit hard following the imposition of the long-term capital gains tax from 0 percent to 10 percent," he said. Sharma also highlighted that in 2019, India was the 18th worst-performing market globally, a direct consequence of the capital gains tax introduction. Read More

Nifty opened on a positive note however as the day progressed breached the crucial supports and ultimately closed in the red down 30 points. On the daily charts we can observe that the Nifty has violated the higher top higher bottom formation and thus has entered a correction phase. It can correct till 24000 – 23800 which coincide with a Fibonacci retracement level and the 40 day moving average. The daily momentum indicator has a negative crossover which is a sell signal. Thus, the minor degree pullback towards 24550 – 24600 should be used as a selling opportunity.

Bank Nifty has decisively broken below the support zone of 51900 – 52100 which was being held on till now. This suggests that the Bank Nifty can correct towards 51290 – 50580 which is the 40 day average and the 38.2% Fibonacci retracement level of the 46077 – 53358 rally. Overall, we expect weakness over the next few trading sessions

Indian benchmark indices ended marginally lower in a volatile session on July 23. At the close, the Sensex was down 73.04 points or 0.09 percent at 80,429.04, and the Nifty was down 30.30 points or 0.12 percent at 24,479.00.

On Budget day, the Nifty fell almost 500 points from its day high. However, post-budget, the Nifty recovered 470 points from its day low, indicating strong bullish momentum that is expected to continue in the upcoming days. If the index manages to close above the 23,500 and 23,600 levels, it could reach new all-time highs. The immediate resistance is at 24,800, while 24,200 and 24,000 act as immediate support levels. If these major support levels break, the index may further correct down to the 50 EMA, which is at the 23,650 level.

The market is expected to remain highly volatile. Investors should hold their positions with a trailing stop-loss. Any dip will be a buying opportunity as the overall trend remains bullish.

The India VIX, a gauge of market volatility, decreased by 17.43 percent intraday to settle at 12.7475, indicating increased market uncertainty. In terms of Open Interest (OI) data, the highest OI on the call side was observed at the 24,800 and 25,000 strike prices, while on the put side, it was at the 24,300 strike price.

The budget has ensured fiscal discipline, while ensuring impetus to growth is not compromised upon. Pragmatism has prevailed across key announcements seen. Change in capital gains tax (increase) and increase in STT may be a near term sentiment spoiler, however as market focus moves to growth trajectory and earnings potential, the medium to long term case for equities remain intact.

No increase in govt borrowing program and the sustained path to fiscal prudence could mean lower interest rates in the coming quarters. FPI continues to be net buyers in both equities and fixed income, which also adds to the liquidity flows from external sources.

Union Budget day turned into a roller coaster for investors, with the Nifty Index fluctuating dramatically before ending the session flat. The initial mood was subdued, but the announcement of increased STT on F&O and higher STCG and LTCG tax rates sparked a sharp reaction midway through the day. However, buoyant performance from select heavyweights helped recover most of the losses in the latter half.

Sector-wise, FMCG and IT displayed notable resilience, while realty, metals, and banking faced pressure. The broader indices also underperformed, declining between 0.6% and 0.9%.

Given the volatility, we advise maintaining a cautious stance. It’s crucial for Nifty to sustain above the 24,200 level to keep a positive outlook; otherwise, profit-taking may intensify. Traders should adopt a hedged approach and favor defensive sectors such as FMCG, pharma, and IT for long trades. Conversely, avoid adding to positions in overbought themes like defense, railways, and select PSUs, and use any recovery to reduce exposure in loss-making trades.

The overall budget appears balanced, with the new coalition government clearly focusing on agriculture, manufacturing, employment generation, youth skilling, MSME support, and urban infrastructure development. This budget sets priorities for a "Viksit Bharat." Initiatives like the credit guarantee scheme for MSMEs and Mudra Loans are positive steps for MSME growth. In terms of tax reforms, the increase in LTCG by 2.5% and STCG by 5% could have been avoided but it is not expected to significantly impact market sentiment.

The budget maintains a good fiscal deficit and yet focusses on channelising resources to the desired sections. We remain confident in investing in India and believe in the vision of Viksit Bharat 2047. Many sectors like manufacturing, agriculture, infrastructure and consumption will benefit from this budget.

The Nifty remained highly volatile on budget day as traders adjusted their positions in accordance with the budget announcements. On the daily chart, a hammer kind of pattern has formed. On the other hand, the RSI is emerging from the overbought zone with a bearish crossover. On the lower end, immediate support is placed at 24,400.

Heavy call writing at 24,500 indicates that the selling pressure will remain prevalent in the market until Nifty decisively breaches above 24,500. On the lower end, a fall below 24,400 might trigger a correction towards 24,200/24,000.

Market participants remained cautious with a positive bias ahead of the Union Budget. As the budget speech was in progress; a steep fall was seen across the board followed by V-shaped recovery. With a marginal loss of 30 points, Nifty50 settled the trade at 24,479.05.

The FMCG segment was the top performer of the day by advancing over 2.60% followed by Media and IT while Realty and PSU Banking were the major laggards. Mid and Smallcaps also recovered from the lower levels but not sufficiently to outshine the Frontline Index.

By forming a small red candle with a big lower shadow, the Index has tested and defended its strong support of 24,200. We believe that as long as the Index holds 24,200, the uptrend will remain intact. On the higher side, 24,800 will continue to act as a strong hurdle.

The index experienced a correction during the day due to weakness in the market. Additionally, the index slipped below the 21-day exponential moving average, indicating a weakening trend. Sentiment might remain weak in the short term or until the index stays below 52,100. On the lower end, it might move towards 51,200–51,000. On the higher end, resistance is placed at 52,100/52,550.

The good part about the Budget is that it will accelerate fiscal consolidation, and create jobs and there is a sense of consistency in policy, according to Prashant Jain, CIO of 3P Investment Managers. Despite some grumblings about the hike in long-term capital gains (LTCG) tax and short-term capital gains (STCG) tax, Jain said the Budget was overall positive.

However, Jain is cautious in his outlook, barring some pockets of the market. He is bearish on stocks in the manufacturing, industrial, and defence sectors, irrespective of whether they are public sector or private. Jain's caution stems from the sharp surge in these stocks over the last year. Read More

Indian rupee ended marginally lower at 83.69 per dollar on Tuesday against Monday's close of 83.66.

Indian benchmark indices ended marginally lower in the volatile session on July 23.

At close, the Sensex was down 73.04 points or 0.09 percent at 80,429.04, and the Nifty was down 30.30 points or 0.12 percent at 24,479.00. About 1488 shares advanced, 1949 shares declined, and 74 shares unchanged.

Titan Company, Tata Consumer, ITC, NTPC and Adani Ports were among the top gainers on the Nifty, while losers included L&T, ONGC, Hindalco, Shriram Finance and Bajaj Finance.

Among sectors, FMCG, healthcare, media and IT indices were up 0.5-2.5 percent. However, bank, capital goods, metal, oil & gas and reality were down 1-2 percent.

The BSE midcap index shed 0.7 percent, while the smallcap index ended on flat note.

The government's dedication to empowering MSMEs through various initiatives deserves praise. These initiatives, like the Credit Guarantee Scheme, will grease the wheels of manufacturing by simplifying access to loans for critical machinery and equipment purchases. Additionally, Digital Footprints for Credit Assessment will open financing doors for MSMEs without formal accounting systems. The MUDRA scheme's increased loan limit empowers successful entrepreneurs to scale their businesses, while expanding the TReDS platform improves MSME working capital by facilitating easier conversion of receivables into cash. Zetwerk works with over 10,000 small manufacturing partners and these were some genuine issues which were plaguing their growth.

The Employment Linked Incentive is a game-changer, offering a helping hand to new employees and motivating manufacturers to create jobs. This will significantly boost the economy and address the manufacturing sector's talent shortage.

The development of "plug and play" industrial parks in nearly 100 cities with complete infrastructure is a positive step towards creating a more manufacturing-friendly environment. Measures like reduced customs duty on mobile phones and components, abolishment of angel tax for startups, and the expansion of exemptions for solar cell and panel manufacturing will all contribute to propelling domestic manufacturing and innovation. At Zetwerk, we are committed to building a pan-India manufacturing footprint across electronics, renewables and aerospace & defence sectors and be a key player in India's growth story. We believe the budget's measures will create a more supportive environment for manufacturing, empowering businesses like ours to flourish.

People come to markets for capital gains, not for what tax rate is in place.

If the macro story of earnings is intact, the negative sentiment in market may not last.

MCX Gold and Silver prices faced significant selling pressure following a reduction in basic customs duty from 10% to 5%, and a decrease in AIDC from 5% to 1%, resulting in a total import duty of 6%. This move has led to a sharp decline in prices, with Gold down by Rs. 4000/10 grams and Silver plummeting by Rs. 4090/kg.

While cheaper prices may stimulate domestic demand in the medium term, short-term trends could be influenced by Federal Reserve policy decisions. There remains potential for further downside, given the unexpectedly high import duty cut.

The Finance Minister's 7th straight Budget has as its objective Viksit Bharat. I find the budget as a forward looking, equitable, middle class oriented all-inclusive budget, covering poor, women, youth and farmers. With Clear emphasis on 9 priorities, it lays down the road map for infrastructure development, startups, SME's, job creation, and skill development, innovation, etc. These are likely to create new opportunities, uplift demand, and unlock multipliers for the economy including long term capital formation with fiscal prudence

#1 Average taxation has come down for asset classes

#2 This encourages investment in the market

#3 Average LTCG taxation has come down for asset classes below average to 12. 5%

#4  Attempt to widen tax net has been made. It has to be widened for both direct and indirect tax

#5 PSU dividends have gone up. Non-tax revenue mobilisation is happening

#6  Idea is to utilise asset monetisation better rather than selling assets

#1 Continue to see GDP growth at 6.6% in FY25, 6.2% in FY26

#2 Fiscal Deficit on track to reach 4.5% of GDP by next fiscal year

#3 Certain degree of structural reforms still needed in agricultural, labour markets

#4 Welcome the change in tax rates on property sale

#5 Investor interest will come back due to lower LTCG on property sale

#6 There is an issue on sale of older properties

#1 Company retained its guidance to launch Thane project during the festive season (Q3FY25)

#2 Company retained guidance to launch one tower each in the Borivali & Goregaon projects

#3 Factor-in these projects into launch pipeline with a pre-sales estimates of Rs 600 crore for FY25

#4 Company has signed new projects in recent quarters but believe it lacks robust project pipeline

#5 Company does not have meaningful pre-sales growth visibility beyond FY27

#6 Believe valuation remains expensive

The market reacted negatively to the increase in the Securities Transaction Tax (STT) and capital gains taxes. The Nifty index slipped towards 24,000, while the Bank Nifty drifted down by 1,000 points.

The Finance Minister kept the capital expenditure intact at Rs 11.11 lakh crore, while projecting a fiscal deficit of 4.9% for FY 25. This budget is mainly focused on rural and underdeveloped areas at the expense of financial market gains.

Bondada Engineering's subsidiary Bondada Green Engineering has received work orders from M/s. Svojas Power for Fabrication, galvanizing and supply of various types of towers and tower parts, tower extensions (complete), excluding bolts & nuts, steps bolts and stubs but including hangers, DShackles pack washers etc, amounting to Rs 4,99,12,208 to Jharkhand.

Also, Bondada Engineering has received work orders from Bharti Airtel for supply of 6 Mtr Height GI pole Wt 60kg (Hot Dipped Galvanised) without Base, amounting to Rs 1,71,10,000 (including GST) to Tamilnadu.

The board of directors of SpiceJet at its meeting held on July 23, 2024 approved raising of funds aggregating up to Rs 3,000 crore through issue of equity shares or any other eligible securities to qualified institutional buyers by way of qualified institutional placement.

From the markets perspective the raising of STCG to 20% and LTCG to 12.5% is a body blow. We need to brace ourselves for a negative reaction in the short term. In the light of all the concerns raised about the hyper active interest in the F&O segment it is not surprising that the STT on F&O has been raised 5 times from 0.02% to 0.1%. Hopefully this will moderate the frenzy in this space.

On the positive side, the relief in Income Tax by way of raising the exemption limit to Rs 3 lakhs and standard deduction to Rs 75,000 is very welcome. This will put an incremental Rs 17,500 in the hands of a salary payer and support the consumption led growth in the economy.

This budget has achieved the trinity of impossible. Fiscal Prudence, Investment and Growth momentum.

Fiscal Prudence of 4.9 % for FY 24 will pave the way for Rating upgrade. Support to employment generation will boost growth. Infrastructure investment at 3.4 % of GDP is elevated yet not crowding out others.

The Union Budget kept the capital expenditure unchanged and pared the fiscal deficit to 4.9% of GDP in line with ICRA's estimates, although the cut in borrowings is smaller than what we had expected. The anticipated reiteration of the reduction in the fiscal deficit to below 4.5% of GDP in FY2026, is welcome. Interestingly, the new medium term fiscal consolidation path has been linked to a reduction in the debt/GDP ratio instead of continued compression of the fiscal deficit/GDP ratio. This will allow the Government flexibility to chart an appropriate fiscal course that builds in higher capital spending as well as support to meeting the climate goals, in a fairly uncertain global environment.

#1 Q1 earnings data showed strong beat

#2 Deliveries of 274 MW versus estimate of 250 MW

#3 WTG segment contribution margin stood at 22.4 percent

#4 Balance sheet remains strong with net cash position of Rs 120 crore

Customs duty on gold and silver has been reduced to 6% that may lead to a decline in domestic prices and perhaps lift demand. The existing duty on gold and silver is 15 percent which comprises 10 percent of basic custom duty and 5 percent as Agricultural Infrastructure Development cess.

The triad of welfare spends, capital expenditure and fiscal discipline has been beautifully balanced by the Government in this budget. There is a good amount of welfare spend on women led development, the MSME sector and the agriculture sector covering a large part of the populace. Augmenting the welfare spends with an adequate thrust on capital expenditure while containing the fiscal deficit at 4.9% of GDP is a fine balancing act. However, the increase in capital gains tax and securities transaction tax is a dampener for capital markets.

#1  Income-tax slab rates changed for the lower slabs, for the new simplified income tax regime

#2  Standard deduction, for taxpayers opting for the new tax regime, at Rs 75,000, up from Rs 50,000 earlier

#3  NPS Vaatsalya for minor children announced in Budget 2024. Where parents can invest on behalf of their kids. Upon attaining majority, this can be converted to regular NPS

# 4 Deduction on employers’ contribution to private sector employees’ NPS has been hiked to 14%, up from 10% earlier. Only for the new income-tax regime.

#5  Changes in capital gains tax regime. Long-term capital gains rate hiked to 12.5%, up from 10%

#6  Long-term capital gains income up to Rs 1.25 lakh exempt from tax

#7  Holding period of capital gains tax streamlined: All listed financial assets held for more than a year: long-term. All unlisted financial and non-financial asserts held for more than 2 years: long-term.

From CNBC-TV

This was not in line with expectation of market participants, the rise in STCG and LTCG taxation as well as STT on F&O. On a lighter note in my sense the government wants the markets to cool off. While the fiscal math was adding, this wasn’t the basic expectation of market. Already the markets have run off very high in the last few months, some kind of a correction because of this is not overruled and that’s what markets are showing now.

Travel and tourism stocks gained after measures to boost domestic travel were announced in the Union Budget.

In the Budget speech, Finance Minister Nirmala Sitharaman detailed plans to construct the Vishnupath temple in Gaya and the Mahabodhi temple in Bodhgaya in a manner similar to the Kashi Vishwanath corridor.

Additionally, there will be efforts to preserve the hot springs in Rajgir and develop Nalanda. Support will also be provided for the development of Odisha’s temples, scenic beauty, natural landscapes, and pristine beaches.

Stocks such as Yatra Online, Easy Trip Planners (Ease My Trip), EIH, Thomas Cook, Praveg gained up to 4 percent. Read More

0-3 lakh - Nil

3-7 lakh - 5%

7-10 lakh - 10%

12-15 lakh - 20%

The unexpected - short term capital gains raised to 20% from 15% and long term to 12.5 %,from 10%, increase STT on futures and options, income from buy back to be taxed, short-term negative, will not fundamentally alter the market direction

#1 Lift FY25 pre-sales growth forecast to 30 percent YoY from 20 percent

#2 Lift FY25 development multiple to 30x from 25x & apply FY26 IP valuation (previously F25)

#3 Projected FY25 growth is above peers

#4 Company could prove to be conservative given a strong launch pipeline

The Union Budget for 2024-25 has hiked the Long-term capital gains tax to 12.5 percent from 10 percent, while short-term capital gains tax is now 20 percent on all financial assets.

Further, LTCG not taxable limit has been increased from Rs 1 lakh to Rs 1.25 lakh.

Capital gains as of now now taxed from 10 percent to the highest nominal rate of 30 percent, depending on the holding period, which varies from one to three years. Read More

Lowest slab in new tax regime increased to Rs 3 lakh from Rs 2.5 lakh