The Sensex index recovered from the capital gains tax shock of the Union Budget and ended at 80,429, down 73 points on Tuesday. The index fell as much as 1,278 points after Union Finance Minister Nirmala Sitharaman hiked STCG to 20 per cent and LTCG to 12.5 per cent. The Nifty 50 index fell 30 points to close at 24,479.
Winners and losers
Titan and ITC were the top gainers on the Sensex index, rising 6.6% and 5.5% respectively. Adani Ports, NTPC, Infosys and HCL Tech also rose, while L&T, Bajaj Finance, SBI, Axis Bank, HDFC Bank and Asian Paints ended lower.
Performance by Category
Consumption stocks were the top gainers after the government announced allocation of Rs 1.52 trillion for the agriculture and allied sector.
Agriculture stocks such as Kaveri Seeds, Mangalam Seed and Dhanuka Agritech closed up to 15 per cent higher.
Seafood stocks Avanti Feeds and Coastal Corporation rose 4.6% and 2.3% respectively after the government promised financial support for the industry.
Capital goods stocks including L&T, Thermax, ABB India and Siemens fell 1.4-3 percent after the government said it would not increase its infrastructure spending plans.
In its budget proposals, the government has increased tax rates on investments in equities held for less than a year to 20 percent from 15 percent and on shares held for more than 12 months to 12.5 percent from 10 percent. It has also increased the securities transaction tax (STT) on derivatives.
What the experts say
“Domestic investors were hoping for an increase in revenues and capital expenditure from the budget. But there are mixed views as fiscal prudence while cutting expenditure may limit further growth,” said Vinod Nair, head of research at Geojit Financial Services.
Aditya Gagar, director at Progressive Shares, said, “By forming a small red candle with a large lower shadow, the index tested and defended the 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.”
