The BSE Sensex, which was holding up as Budget speech was in progress, dropped 460 points to a low 35502 points, as the FM announced the LTCG tax
It was a vertical drop for the markets as the finance minister Arun Jaitley announced long-term capital gains tax on stock market investments.
The BSE Sensex, which was holding up as Budget speech was in progress, dropped 460 points to a low 35502 points, as the FM announced the LTCG tax. Nifty too went down to 10,879.35 during intra-day session.
However, the indices swiftly recovered, but still ended in the red for the second day in a row.
Sensex closed 58.36 points, or 0.16%, lower at 35906.66, while Nifty slipped 10.80 points, or 0.10%, to 11016.90. Though Sensex started on an optimistic note at 36048.99 and rose to 36256.83..
The sentiment was first dampened as the government raised the fiscal deficit figure for the ongoing fiscal to 3.5% of the gross domestic product (GDP) for 2017-18 from 3.2%. The fiscal deficit for 2018-19 has been targeted at 3.3%. The investors, however, had a solace in increase in infrastructure spending and cut in corporate tax on businesses with a turnover of Rs 250 crore to 25%.
Gautam Duggad, head of research, Motilal Oswal Institutional Equities, said, "Overall, it was a balanced Budget. So no major effect on the stock market is expected. But volatility will continue for a week as people will take time to understand the impact of the Budget."
Coming to the sectors on BSE, consumer durables were one of the biggest losers, falling 1.78%, followed by energy (1.55%), healthcare (1.38%) and oil & gas (1.28%). Capital goods were the biggest gainer on Sensex moving up 1.57%. FMCG, metal, auto and power were the other gainers ending on a positive zone on the Sensex. On NSE, pharma lost the most was the biggest laggard, down by 2.41%, which was followed by PSU banks (2.30%), Nifty bank (0.58%).
On S&P Sensex, Mahindra and Mahindra (4.44%), Larsen and Turbo (2.77%), IndusInd Bank (2.44%), Bajaj Auto (2.12%) and Asian Paints (1.89%) were the top gainers gainers. Among losers ONGC fell 4.06%, Sun Pharma (3.99%), Dr Reddy's (3.07%), State Bank of India (2.30%) and ICICI Bank (2.04%).
"There was nothing unexpected in the Budget. Though the 10% tax on long-term capital gains will be heavy on the pockets of investors, the grandfathering allowed till January 31 cooled sentiments. For the next couple of days, markets would end in negative but nothing major change is expected," Arun Kejriwal, founder, Kejriwal Research & Investment Services, said.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth Rs 1,099.78 crore on a net value basis while domestic institutional investors (DII) sold shares worth Rs 358.5 crore on a net basis value on Thursday. In the broader market, S&P mid-cap index fell 0.54% while S&P small-cap ended flat.
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Sensex closed 58.36 points, or 0.16%, lower at 35906.66, while Nifty slipped 10.80 points, or 0.10%, to 11016.90. Though Sensex started on an optimistic note at 36048.99 and rose to 36256.83..
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