Ahead of the budget, BSE Sensex jumped 399 points to its day high of 72,151.02 while Nifty advanced 107 points to 21,832.95. However, both benchmark indices shed nearly a percent each from their intraday highs following the announcement to their respective intraday lows.
The Sensex ended 106.81 points or 0.15 percent lower at 71,645.30. Meanwhile, the Nifty settled 28.25 points or 0.13 percent lower at 21,697.45.
This was the second consecutive time that the Nifty was in the red on a budget day and with less than one percent movement.
In the previous budget session (February 1, 2023), Indian indices ended on a mixed note. The Sensex closed 158 points, or 0.27 percent higher at 59,708.08 while the Nifty ended at 17,616.30, down 46 points, or 0.26 percent.
By 2023, Indian indices moved less than one percent on budget day in 2018, when the market ended flat, down just 0.1 percent. In 2022, the market ended 1.4 percent higher, while in 2021, it was up 4.7 percent on budget day. Meanwhile, in 2020, the market fell 2.5 percent and in 2019, it shed 1.1 percent.
According to data since 2010, the Indian market has moved less than 1 percent on budget day in 7 of the past 15 budget sessions (February 1), including 2024.
In this period, the market fell the most in 2020, down 2.5 percent, and gained the most in 2021, up 4.7 percent. This was the highest gain since 2001 when the market rose more than 4 percent on a budget day.
Another important point to note is that in the last 15 years (1st February budget), 9 times the market has been in the red and it has ended in the green in only 6 budget day sessions.
Year | % change in Nifty on Budget Day | Year | % change in Nifty on Budget Day |
2024 | -0.13 | 2016 | -0.6 |
2023 | -0.2 | 2015 | 0.6 |
2022 | 1.4 | 2014 | -0.2 |
2021 | 4.7 | 2013 | -1.8 |
2020 | -2.5 | 2012 | -1.1 |
2019 | -1.1 | 2011 | 0.5 |
2018 | -0.1 | 2010 | 1.3 |
2017 | 1.8 |
Finance Minister Nirmala Sitharaman presented the Interim Union Budget for FY25 in Parliament today. This was the sixth budget presented by the current FM and the last of the second term of the government led by Prime Minister Narendra Modi. The full budget will be presented in July this year after the new government is formed after the Lok Sabha Elections.
The budget focused on tax consolidation, infra, agri, green growth, and railways. However, no changes were made in the tax rates, which was a disappointment to salaried individuals.
Among key points, the Fiscal Deficit target for FY25 was set at 5.1 percent of GDP, better than expected, while the FY24 target was also revised down to 5.8 percent. Meanwhile, the FY25 capex target has been increased by 11.1 percent to ₹11.1 lakh crores.
“The hallmark of this interim Budget is its fiscal rectitude. The fact that the Government has prioritized fiscal consolidation over populism ahead of the general elections is commendable. The fiscal deficit figures of 5.8 percent in the revised estimates for FY24 and 5.1% for FY25 . are better than the most optimistic expectations. This is very good news for the economy and therefore for the market. The boost to housing is another important proposition from the market perspective, as this will benefit industries such as cement, steel and all construction-related segments,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Meanwhile, Sonam Srivastava, Smallcase Manager, Founder – Wright Research, said:
“Budget 2024 brought several key announcements aimed at strengthening infrastructure, healthcare and housing, along with initiatives to support MSMEs and promote technological advances in defence. In particular, the commitment to affordable housing through the launch of a new scheme for the middle class and the emphasis on next-generation reforms underlines the government’s focus on sustainable development and economic inclusion. The budget’s approach to maintaining stability in tax rates while strengthening the ease of doing business reflects a strategic balance between fostering growth and ensuring fiscal prudence.
The reaction of the market to these announcements was mixed, with positive movements in the FMCG sector, attributed to measures expected to strengthen the spending power of the consumer. Conversely, railway stocks saw a decline, perhaps due to concerns about the execution and immediate impact of the infrastructure projects announced. Overall, the muted market response underscores cautious optimism, with investors looking for more clarity on the implementation of budget proposals.”
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decision.
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Published: 01.02.2024, 15:56 IST