Post Session: Quick Review

Indian indices ended flat on budget day as budget announcements failed to cheer investors’ sentiments. After concluding Finance Minister’s budget speech, markets witnessed recovery from day’s low. Most part of the day, markets trade near neutral lines with negative bias, as traders were cautious after government has declared increasing the Securities Transaction Tax (STT) rate on Futures and Options (F&O) from 0.01 percent to 0.02 percent. Sector wise, FMCG and IT sectors’ stocks ended with healthy gains. The broader indices, the BSE Mid cap index and Small cap index concluded in red.

Markets made positive start tracking gains in global markets. However, indices unable to hold their gains and turned negative, as traders remained cautious with the Global Trade Research Initiative (GTRI) stating that increasing foreign direct investment (FDI) from China in the domestic market may benefit in the short-term but it risks undermining India's long-term economic security and strategic autonomy. It said dependence on Chinese firms for key manufacturing capabilities could also expose India to supply chain vulnerabilities and geopolitical risks. In afternoon session, markets fell sharply and touched day’s low points as government hiked STT rate on F&O. Traders overlooked Finance Minister Nirmala Sitharaman announced changes to the new income tax regime in her Union Budget 2024 speech. These changes included new income tax slabs for FY 2024-25 and a hike in the standard deduction. The standard deduction was hiked from Rs 50,000 to Rs 75,000. Also the tax slab limit for 5% tax rate was changed from Rs 5 lakh to Rs 7 lakh. The capital gains tax regime was completely revamped with tax rates being increased. However, in late afternoon session, indices recouped from losses to ended flat. 

On the global front, European markets were trading higher after rising sharply in the previous session following China's rate cut announcement. Corporate earnings remained in the spotlight, with Tesla Inc. and Alphabet Inc. due to unveil their financial results later in the day. Asian markets ended mixed with mainland China and Hong Kong markets retreating after China's third plenum communique failed to address key economic issues. Back home, Chief Economic Advisor (CEA) V Anantha Nageswaran has said that private sector investment has been improving after Covid-19 and it is expected to further pick up in the coming months.

The BSE Sensex ended at 80,429.04, down by 73.04 points or 0.09% after trading in a range of 79,224.32 and 80,766.41. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.74%, while Small cap index was down by 0.18%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 2.48%, Consumer Durables up by 2.45%, IT up by 0.82%, Healthcare up by 0.59% and TECK was up by 0.56%, while Realty down by 2.15%, Capital Goods down by 2.03%, PSU down by 1.76%, Industrials down by 1.48% and Oil & Gas was down by 1.32% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Titan Company up by 6.63%, ITC up by 5.52%, Adani Ports up by 2.83%, NTPC up by 2.36% and Infosys up by 1.46%. On the flip side, Larsen & Toubro down by 3.10%, Bajaj Finance down by 2.18%, SBI down by 1.65%, Axis Bank down by 1.62% and HDFC Bank down by 1.39% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s growth prospects, Chief Economic Advisor V Anantha Nageswaran has said a 7 per cent Gross Domestic Product (GDP) growth rate, the upper end of the projection made in the Economic Survey, is doable depending on monsoon and global financial risks. The Economic Survey projected India’s GDP to grow between 6.5 per cent and 7 per cent in 2024-25, down from a high of 8.2 per cent in the preceding financial year. He said ‘We are not pessimistic. We actually are optimistic about growth. We are also mindful of the challenges with regard to progress of monsoon’.

He said ‘We want to be prudent in projecting growth rate, that is why we have projected the country’s economic growth at 6.5 per cent to 7 per cent in FY24’. He also said ‘While 7 per cent is eminently doable, there are some risk factors given the way the monsoon has shaped up and financial market risks are rising in the developed world with the spillover effects on India, and also the global geopolitics environment’. According to him, there is momentum in the economy and private capital expenditure has picked up. He added India’s external debt ratio is much lower compared to other emerging economies.

Nageswaran also said inflationary pressure is under control, and core inflation is running well below 4 per cent. He also noted that India needs to create 80 lakh jobs per annum. He said the production-linked incentive (PLI) scheme is beginning to deliver very handsomely in key areas. PLIs have been able to attract investment of Rs 1.28 lakh crore and generated 80 lakh jobs. Despite securing a good rating on its green bond framework, he said, Indian sovereign green bonds have hardly received any ‘greenium’ from private investors. He said ‘It is more a ‘wall of capital’ than a ‘flood of capital’ that is waiting to fund energy transition in emerging market and developing economies (EMDEs). It just isn’t mobile. All of these together have severely hampered the flow of finance for green transition projects.’

The CNX Nifty ended at 24,479.05, down by 30.20 points or 0.12% after trading in a range of 24,074.20 and 24,582.55. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Titan Company up by 6.53%, ITC up by 5.50%, Tata Consumer up by 4.32%, Adani Ports up by 2.73% and NTPC up by 2.40%. On the flip side, Shriram Finance down by 3.12%, Larsen & Toubro down by 3.11%, Hindalco down by 2.80%, Bajaj Finance down by 2.28% and ONGC down by 2.07% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 4.73 points or 0.06% to 8,203.51, France’s CAC rose 16.08 points or 0.21% to 7,638.10 and Germany’s DAX was up by 183.1 points or 0.98% to 18,590.17. 

Asian markets ended mixed on Tuesday after a rally on Wall Street shares overnight and ahead of US GDP and inflation readings this week for further cues on the interest rate trajectory. Meanwhile, market sentiments were stabilized as semiconductor shares rebounded ahead of big earnings from US technology firms, with Tesla and Google set to report their financial results later in the day. Seoul shares gained led by tech and auto shares. Chinese and Hong Kong shares declined after China's third plenum communique failed to address key economic issues, while a surprise rate cut by China's central bank put the spotlight on the country's economic weakness. Japanese markets ended flat, while the Japanese yen strengthened ahead of the Bank of Japan's policy meeting next week, with no change in interest rates expected.