Sensex recovered from the capital gains tax shocker in the Union Budget and ended 73 points lower at 80,429 on Tuesday. The index had fallen up to 1,278 points after Union Finance Minister Nirmala Sitharaman hiked STCG to 20% and LTCG to 12.5%. Nifty 50 dropped 30 points and closed at 24,479 at closing.
Gainers and losers
From the Sensex pack, Titan and ITC were the top gainers, rising 6.6% and 5.5%, respectively. Adani Ports, NTPC, Infosys, and HCL Tech also ended with gains, while L&T, Bajaj Finance, SBI, Axis Bank, HDFC Bank, and Asian Paints closed with cuts.
SECTORAL PERFORMANCE
Consumer stocks were the top gainers after the government said it would allocate Rs 1.52 lakh crore for the agriculture and allied sectors.
AGRI stocks like Kaveri Seeds, Mangalam Seed and Dhanuka Agritech closed upto 15% higher.
Fisheries stocks Avanti Feed and Coastal Corp rose by 4.6% and 2.3%, respectively, after the government pledged financial support for the sector.
Capital goods stocks like L&T, Thermax, ABB India, and Siemens lost between 1.4% and 3% following the announcement that the government would not increase the amount it planned to spend on infrastructure.
The government raised the tax rate for equity investments held for less than one year to 20% from 15%, and for shares held for over 12 months to 12.5% from 10% in the Budget. It also raised the securities transaction tax or STT on derivatives.
EXPERT VIEW
“Domestic investors had high expectations from the Budget to increase revenue and capital expenditure. However, the narrative is mixed, by curtailing expenditure while attaining fiscal prudence, which can limit further growth,” said Vinod Nair, Head of Research, Geojit Financial Services.
Aditya Gaggar, Director of Progressive Shares, said, “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.”
