Following the conclusion of Finance Minister Nirmala Sitharaman's interim budget statement in the Parliament, Indian benchmark indices began to decline. The NSE Nifty dropped by 67 points to 21,659 levels, while the BSE Sensex dropped as much as 167 points to a low of 71,585. But soon after, the market recovered its losses and was positively biased and trading close to the baseline.
During FM Sitharaman's presentation of the Interim Budget 2024 in Parliament today, the equity market continued to rise. The 30-share Sensex increased by 399 points to 72,151 during the Budget address, while the wider Niffty increased by 107 points to reach an intraday high of 21,833 points.
The Nifty50 ended the day at 21,780.65, up 55 points from Wednesday's closing record of 21,725.70, and the Sensex opened the day at 71,998.78, up 247 points from the previous closing level of 71,752.11.
Maruti Suzuki India, Power Grid Corporation of India, Mahindra & Mahindra, Tata Consultancy Services, and ITC were the top gainers on the BSE Sensex. However, Bharti Airtel, Wipro, Tech Mahindra, UltraTech Cement, and Larsen & Toubro.
The nation's FY25 capital investment outlay has increased by 11.1% to ₹11.11 lakh crore, or 3.4% of GDP, the finance minister said in her speech. She did, however, lower the Budget projection of the fiscal deficit from FY24 (BE) of 5.9% to 5.8%.
The essence of this interim budget, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, is its "fiscal rectitude," since the administration prioritised fiscal consolidation over populism on the eve of general elections. "The updated forecasts for FY24 and FY25 show a budget deficit of 5.8% and 5.1%, respectively, which is better than even the most optimistic predictions. This is excellent news for the market as well as the economy.
From a market standpoint, "the housing boost is another important proposal since this will benefit industries like cement, steel, and all construction related segments," continues Vijayakumar.
"The Finance Minister reports a significant milestone, citing a doubling of tax collections over the past decade," says Siddhesh Mehta, research analyst at Samco Securities. Interestingly, import duties and other direct and indirect taxes are kept at the same levels in the current budget. This predictability may help businesses manage their financial planning and create a more safe and long-lasting corporate environment.
Fertiliser stocks from the sector, including Southern Petrochemical Industries Corporation Ltd (SPIC), Aries Agro, and Nagarjuna Fertilisers, increased by up as 7% on FM's announcement that Nano DAP would henceforth be used widely and methodically. "Nano DAP application on various crops will be expanded in all agroclimatic zones after successful adoption of nano urea," the speaker states in her address.
The Federal Reserve announced its policy and kept interest rates steady for a fourth straight meeting, which also caused the market to respond. The U.S. Federal Reserve maintained its target range for the key policy rate at 5.25%–5.50%, noting that it would be appropriate to lower it until the central bank has more confidence in inflation.
The U.S. Federal Reserve kept interest rates unchanged for a fourth consecutive meeting, in line with market forecasts. The Fed does not anticipate rate cuts until it sees "greater confidence that inflation is moving sustainably towards 2%," according to Prashant Tandon, Senior Director, Listed Investments Client Advisory, Waterfield Advisors. This is a slight departure from the meeting's December statement.
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