Key equity indices came off the day's low in mid-afternoon trade after Finance Minister Nirmala Sitharaman concluded the Budget 2020 speech. The Nifty regained the crucial 11,800 mark and traded near its 100 days simple moving average placed at 11,824.03.
At 14:17 IST, the S&P BSE Sensex, tumbled 484.58 points or 1.19% at 40,238.91. The Nifty 50 index tumbled 137.75 points or 1.15% at 11,824.35.
In the broader market, the S&P BSE Mid-Cap index was down 0.92% while the S&P BSE Small-Cap index was down 0.85%.
The market breadth was titled in the favour of bears. On the BSE, 726 shares rose and 1474 shares fell. A total of 126 shares were unchanged. In Nifty 50 index, 10 stocks advanced while 40 stocks declined.
Gainers & Losers:
TCS (up 2.69%), Hindustan Unilever (up 1.66%), Infosys (up 1.06%), ITC (up 0.87%) and HCL Technologies (up 0.34%) were top gainers in Nifty 50 index.
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Bajaj Finserv (down 5.16%), HDFC (down 4.6%), L&T (down 4.35%), ZEE (down 3.59%) and Tata Motors (down 3.54%) were top losers in Nifty 50 index.
Union Budget 2020:
Finance minister Nirmala Sitharaman will hold post-budget press conference at 3:00 pm in the National Media Centre.
FM Sitharaman informed Parliament during Budget presentation that India's fiscal deficit is now pegged at 3.8% for FY20 and 3.5% in 2021. Nominal GDP growth for FY21 revised to 10%.
FM said that the fundamentals of the economy are strong. Central government's debt has come down to 48.7% in March 2019 from 52.2% in March 2014.
FM retained long-term capital gains (LTCG) tax on equity mutual funds in the Union Budget. Most market participants were expecting a roll-back of LTCG tax and an extension of holding period to qualify for LTCG tax.
FM proposed a new income tax regime. As per the new regime, no tax exemptions will be available but the income between Rs 5 lakh and Rs 7.5 lakh will be taxed at 10% down from current 20%, income between Rs 7.5 lakh and Rs 10 lakh will be taxed at 15% down from current 20%, and income between Rs 10 lakh and Rs 12.5 lakh will be taxed at 20% down from current 30%. Income between Rs 12.5 lakh and Rs 15 lakh will be taxed at 25% down from current 30%. Incomes above Rs 15 lakh will continue to be taxed at 30%. However, to avail this scheme, which is optional, taxpayers will have to let go of exemptions.
Around 70 of the existing exemptions and deductions of different nature (more than 100) have been proposed to be removed. Remaining exemptions and deductions will be reviewed and rationalised in the coming years with a view to further simplifying the tax system and lowering the tax rate.
FM proposed to abolish Dividend Distribution Tax (DDT). Companies will not be required to pay DDT. Dividend to be taxed only at the hands of recipients, at applicable rates.
The government is proposing to sell a part of its holding in Life Insurance Corporation of India (LIC) by initial public offer.
FM reassured taxpayers about commitment to eliminate tax harassment. "We wish to enshrine in the statutes a taxpayer charter through this Budget. Our govt remains committed to taking measures to ensure that our taxpayers are free from tax harassment of any kind," FM said.
Sitharaman said that national security is the government's top priority. Wealth creators will be respected in the country, she indicated.
FM proposed to extend the Rs 1.5 lakh benefit on interest paid on affordable housing loans by a year to March 2021.
FM said that mechanism will be made to address liquidity constraints of NBFCs and Housing finance corporations. Government will offer support by guaranteeing securities floated to provide liquidity for NBFCs.
FM assured that robust mechanism is in place to monitor health of all schedule commercial banks and depositors money is absolutely safe. Deposit Insurance and Credit Guarantee Corporation has been permitted to increase deposit insurance coverage to Rs 5 lakh per depositor from Rs 1 lakh.
Stocks in Spotlight:
The budget proposed to sell government stake in IDBI Bank to private investors. Following the announcement, IDBI Bank surged 15.93% to Rs 39.30.
Mahindra & Mahindra announced December 2019 sales numbers during market hours today. M&M's overall automotive sales (domestic + exports) stood at 52,546 vehicles in January 2020, down by 6% from 55,722 vehicles during January 2019. Domestic sales contracted 3% to 50,785 units while the total exports slumped 45% to 1761 units in January 2020 over January 2019. M&M Farm Equipment Sector's (FES) total tractor sales rose 4% to 23,116 units in January 2020 from 22,212 units in January 2019. Domestic sales in January 2020 were at 22,329 units, as against 20,948 units during January 2019, up 7% YoY. Exports for the month slumped 38% to 787 units from 1264 units in the year ago period.
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