Indices trade with deep cuts; Titan spurts 6%; VIX drops 13.5%

The domestic equity benchmarks traded with significant losses in the afternoon trade after the Budget for 2024-25 was laid down in the Parliament by the Finance Minister. The Nifty traded around the 21,300 mark after hitting the days high of 24,582.55 in early trade. Metal, oil & gas and PSU bank shares declined while FMCG, consumer durables and healthcare shares advanced.

At 13:30 ST, the barometer index, the S&P BSE Sensex, was down 630.72 points or 0.80% to 79,864.96. The Nifty 50 index shed 208.40 points or 0.85% to 24,300.85.

In the broader market, the S&P BSE Mid-Cap index fell 1.35% and the S&P BSE Small-Cap index slipped 0.87%.

The market breadth was weak. On the BSE, 1,258 shares rose and 2,574 shares fell. A total of 117 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, tumbled 13.52% to 13.35.

Union Budget 2024:

Finance Minister Nirmala Sitharaman concludes the first Union Budget of the Modi 3.0 government. FM announces changes to the new tax regime, including an increase in the standard deduction from Rs 50,000 to Rs 75,000. Salaried employees under the new tax regime will save up to Rs 17,500 in income tax.

In the new tax regime, the tax rate structure will be revised as follows: income up to Rs 3 lakh will be taxed at zero; Rs 3 lakh to Rs 7 lakh will be taxed at 5%; Rs 7 lakh to Rs 10 lakh will be taxed at 10%; Rs 10 lakh to Rs 12 lakh will be taxed at 15%; Rs 12 lakh to Rs 15 lakh will be taxed at 20%; and income above Rs 15 lakh will be taxed at 30%.

The Securities Transaction Tax (STT) on futures and options (F&Os) is proposed to be increased to 0.02% and 0.01%, respectively.

Additionally, the Finance Minister states that long-term capital gains on all financial and non-financial assets will be taxed at a rate of 12.5%. The limit of exemption for capital gains will be set at Rs 1.25 lakh per year. Listed financial assets held for more than a year will be classified as long term.

The FM states that the union government will target a fiscal deficit of 4.9% of the gross domestic product (GDP) for FY25, compared to the 5.1% target set in the interim budget. Gross borrowing is targeted at Rs 14.01 lakh crore, with market borrowing at Rs 11.06 lakh crore. The fiscal deficit target for FY26 is set at 4.5% of GDP.

Sitharaman notes that the government will maintain strong fiscal support for infrastructure, allocating Rs 11.11 lakh crore for capital expenditure, amounting to 3.4% of India's GDP. The government also allocates Rs 1.52 lakh crore for agriculture and allied sectors.

The Finance Minister emphasizes expanding the space economy by five times over the next 10 years, supported by a venture capital fund of Rs 1,000 crore. GST has significantly reduced tax incidents for the common man and eased compliance for industry. To enhance the benefits of GST, the government will strive to rationalize the tax structure.

The Finance Minister adds that rules and recognition for Foreign Direct Investments (FDIs) will be simplified to facilitate their inflow, aiming to promote the use of the Rupee for overseas investments. Sitharaman also proposes supporting the development of corridors at Vishnupad Temple and Mahabodhi Temple, following the model of the Kashi Vishwanath Temple, and backing the development of Nalanda in Bihar as a tourist center. An economic policy framework will be introduced to usher in next-generation reforms aimed at boosting economic growth. Additionally, the government will provide assistance to Odisha for the development of tourism.

Gainers & Losers:

Titan Company (up 6.07%), ITC (up 4.52%), Tata Consumer Products (up 3.37%), Hindustan Unilever (up 1.91%) and Britannia Industries (up 1.74%) were major Nifty gainers.

Oil & Natural Gas Corporation (down 3.80%), Larsen & Toubro (down 3.51%), Shriram Finance (down 3.25%), Hindalco Industries (down 3.17%) and Bajaj Finance (down 3.04%) were major Nifty losers.

Stocks in Spotlight:

Gensol Engineering was locked in 5% upper circuit after the company announced that it has emerged as winning bidder for 116 MW (150 MWp) of solar projects in Gujarat with approx. EPC revenue of Rs 600 crore.

Coforge rose 1.59%. The IT companys consolidated net profit fell 40.45% to Rs 133.2 crore in Q1 FY25 as compared to Rs 223.7 crore in Q4 FY24. However, Revenue from operations increased 1.79% to Rs 2,400.8 crore in Q1 FY25 as compared to Rs 2,358.5 crore reported in the preceding quarter same year.

Mangalore Refinery & Petrochemicals (MRPL) slipped 4.47% after it reported 93.53% drop in standalone net profit to Rs 65.57 crore in Q1 FY25 from Rs 1,012.74 crore recorded in Q1 FY24. Revenue from operations (excluding excise duty) rose 10.4% to Rs 23,247.02 crore in June 2024 quarter as compared to Rs 21,057.6 crore recorded in corresponding quarter previous year.

GE Power India declined 2.03%. The company said that it has received supply order from NTPC GE Power Services (NGSL), with a contract value of Rs 348 crore.

Global Markets:

Most European stocks declined while Asian stocks traded mixed on Tuesday.

On Tuesday, Wall Street rally fueled by strong earnings reports from major tech companies. Taiwan's market, led by semiconductor stocks, snapped a five-day losing streak.

This surge follows gains on Monday in the US, where the S&P 500 rose over 1% and the tech-heavy Nasdaq jumped 1.6%. Both indexes were recovering from their worst weekly performance since April. Investors seemed unfazed by the news of President Biden exiting the presidential race, instead focusing on upcoming earnings reports from tech giants Tesla and Alphabet. Both companies' stocks saw significant gains on Monday.

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