Indian stock markets today July 23rd experienced a strong downturn following Finance Minister Nirmala Sitharaman’s Budget 2024 speech. The key indices Sensex and Nifty 50 initially plunged nearly 2% as the government proposed increased taxes on market gains and derivatives trading.
As of the latest update the markets are showing signs of recovery. The Nifty 50 stands at 24,436.05 down 0.30% or 73.20 points while the Sensex is at 80,332.64 down 0.21% or 169.44 points.
Nifty 50 Index: TradingView
The finance minister announced a doubling of the Securities Transaction Tax (STT) on futures and options trading to 0.02% and 0.1% respectively. This move appears aimed at curbing excessive speculation in the derivatives market. Additionally, the long-term capital gains (LTCG) tax rate on all financial and non-financial assets has been increased from 10% to 12.5% while the short-term capital gains (STCG) tax on certain financial assets has been raised from 15% to 20%.
These tax hikes have sent shockwaves through the market leading to a sell-off across various sectors. The Indian rupee also felt the impact touching a record low of 83.69 against the US dollar.
Despite the overall market decline some sectors saw positive movement. Agriculture stocks rallied up to 10% following the announcement of a Rs 1.52 lakh crore allocation for the sector. The government also proposed reducing the basic customs duty on gold and silver to 6% and fully exempting customs duty for 25 critical minerals including lithium, copper and cobalt.
In other budget highlights the fiscal deficit for FY25 is pegged at 4.9% of GDP with the government aiming to bring it below 4.5% by next year. The finance minister also announced plans to support the setting up of 12 industrial parks and allocate Rs 2 trillion for job creation over 5 years.
Looking at the top performers and losers based on the provided charts Titan leads the gainers with a 6.65% increase followed by ITC at 4.28%, Tata Consum at 3.40%, Adani Ports at 2.86% and Hindustan Unilever at 2.35%. On the flip side LT tops the losers list with a 3.78% decline followed by Hindalco at 3.61%, ONGC at 3.12%, Bajaj Finance at 2.25% and SBI Life Insurance at 2.24%.
Meanwhile, Bajaj Finance, HUL, Kajaria Ceramics, DCM Shriram, M&M Financia, Torrent Pharma, ICICI Securities, SRF, Steel Strips Wheels are among the stocks that will report their earnings today among the total 33 earnings.
As the market digests these significant policy changes, we will be closely watching for further developments and potential long-term impacts on various sectors of the Indian economy.
