MARKET WRAP: Sensex tumbles almost 1,000 pts as Budget disappoints D-St

All that happened in the markets today

4:45 PM

MARKET COMMENT :: Shrikant Chouhan, Sr Vice-President, Equity Technical Research, Kotak Sec

Post the announcement of the budget, benchmark Nifty tanked vertically to 11,650, a fall of over 300 points fall during the day. It happened mainly due to lot of expectations that D-street had built in the run-up to the event. We feel that the budget is balanced and has taken care of a number of sectors. It will certainly have a positive impact in the long run. Technically, the short-term trend is weak and is likely to continue for the next few trading sessions. The 11,875 level should be the immediate hurdle for the market and below the same, we could see extended correction wave up to 11,500- 11,350 levels. Currently, the Nifty is trading near 200 day SMA that suggests that if the index sustains above 11,725, we could witness a relief rally up to 11,800-11,875 levels. Any pullback rally should be used to reduce weak long positions. However, we can invest in strong companies between 11,350 -11,500 levels.

4:23 PM

MARKET COMMENT :: Dinesh Thakkar – CMD, Tradebulls Securities

Government had to walk a tight rope by adhering fiscal measures to ensure high growth with minor slippage and in line with street expectations. With the fiscal deficit in FY20 pegged at 3.8% and 3.5% for FY21, the government has managed to contain higher fiscal slippage. To boost consumption and growth in the economy, the Finance Minister has slashed personal income tax and allocated funds towards infrastructure. Tweaking investment limit for FPI in corporate bonds will help our currency and abolishment of DDT could improve market sentiments. As part of a broader strategy to stimulate credit growth and consumer spending in rural areas, higher allocation and providing subsidy/incentive will augur well for the economy.

4:16 PM

MARKET COMMENT :: Quote by Abhishek Bansal, Chairman and MD, Abans Group of Companies

Abolishment of DDT will really help the industry, which was earlier facing an effective DDT of 20.35%.

 

Removal of interest and penalty payment on disputed tax, if paid by 31st March, 2020 and some additional penalty, only if paid till 30th June 2020, is a welcome move, as it will increase the tax receipts for the government and also relieve the taxpayer from the cost of excessive penalties and cost of paperwork.

 

Creation of an International Bullion Exchange by GIFT CITY will add liquidity and depth to the gold commodity market. There is tremendous value potential to be unlocked from the gold industry in India in terms of it being one of the largest consumers of the precious metal globally and in terms of the finesse of jewellery produced in India, thereby acting as a vast employment generator. As the true value of this gets unlocked by the formation of the bullion exchange, India will gain its rightful place in the global gold markets.

Enablement of rupee derivatives trading at GIFT City, Gujarat is also a welcome decision as it will offer greater credibility, and hence allow the Rupee to find its true value.

 

Simplification undertaken in the personal tax slabs is a welcome step for the public at large, as it will add real money into their hands and will probably kick start the economy through increased spending by the retail consumers.

 

Partial sale of stake in LIC is also a welcome step because it will provide monetary inflows to the government, which will help fund reduction in inflows due to tax exemptions and other breaks to the industry. This will hence help the government keep the fiscal deficit within the projected limits. If this is read in conjunction with the government’s efforts for divestment of Air India by offering a 100% management stake sale as well as support in terms of reduction of debt, a positive story emerges in terms of the government being determined to push through the divestment of strategic assets and hence raise resources.

4:14 PM

Expression of interest for BPCL disinvestment to be out soon: TV reports

4:09 PM

MARKET COMMENT :: Budget quote by Dr Niranjan Hirandani, President ASSOCHAM

For the industry, abolition of Dividend Distribution Tax (DDT) is a welcome move. However, the corporate tax reduction and also the personal income tax slab under the tax regime need a lot of computing before we can fully understand the actual benefits. I would like to comment that this change will benefit only a certain section of the society. Overall, the budget was high on intent and low on execution.

3:59 PM

MARKET OUTLOOK by Vinod Nair, Head of Research, Geojit Financial Services

Budget was below the par considering that market had very high expectations from the government. Adding flexibility to fiscal deficit of FY20 is positive but extending the same to FY21 would have provided more confidence to the market. Income tax changes announced has come with riders of giving up exemptions which disappointed the markets, with insurance sector being impacted the most. Since the event is over, the focus will now turn to on going Q3 announcements and how global events unfolds in the near term. 

3:58 PM

MARKET COMMENT :: Quote from Max Bupa on Budget 2020

The Union Budget 2020 takes a holistic approach to enable growth at a grassroot as well as industry and corporate level. The clear focus of the budget is to make healthcare more accessible with increased infrastructure, as the investment on the healthcare sector has gone up from the previous year. The allocation of additional Rs. 69000 crore is a significant step to improve the overall well-being of the citizens of the country. The expansion of Ayushman Bharat scheme is another big step to fulfil the need gap in secondary and tertiary care, especially for the economically weaker sections of the society. The scheme has benefited many people since its launch who needed medical care but didn’t have adequate funds to support. Ayushman Bharat scheme has also played a huge role in increasing awareness and acceptance of health insurance amongst all sections of the society.

Further, the setting up of more hospital infrastructure in Tier-II and III cities under PPP model via viability gap funding, will further be a boost for the healthcare ecosystem and benefit the underprivileged families which were devoid of basic medical facilities. India has recorded highest out of pocket expenditure on healthcare, as compared to other developing countries. The measures proposed in the budget will support to regulate the gap and play an important role in making health a priority for one and all and creating further awareness for health insurance.

 

However, the budget didn’t address the long pending request of the health insurance industry to remove or minimize GST slab for health insurance premiums paid. As health insurance penetration is still low in the country, change in the GST slab could have been a big driving factor for the consumers to invest in health insurance

3:50 PM

Budget proposals are not really a stimulant amid lack of big-bang steps: Madan Sabnavis

The Budget fell short of expectation that there would be a bold step taken to provide a stimulus. Instead, the Finance Minister chose to work within the confines of the normal budgetary growth numbers to deliver an impact on spending. READ MORE  

3:50 PM

BSE500 stocks that hit 52-week low today

COMPANY	PRICE(rs)	52 WK LOW	CHG(%)
B H E L	39.80	39.25	-6.79
CAPLIN POINT LAB	284.00	280.20	-0.99
COAL INDIA	173.85	171.25	-4.40
DEWAN HSG. FIN.	12.31	12.31	-4.94
EIH	134.00	134.00	-4.39

3:48 PM

MARKET COMMENT :: Budget quote by Krishna Kumar Karwa, MD - Emkay Global Financial Services

Capital Market investors will be disappointed with no relief on LTCG and the lack of big bang stimulus on real estate or infrastructure. The removal of Dividend Distribution Tax seen as a continuation of earlier step of reducing corporate tax is well appreciated and sends the right signals to local and global investors . The option to individuals to opt for a lower tax slab structure with no deductions or to continue with the earlier higher slabs with deductions for home loan  EMIs , investments in insurance etc seems slightly confusing. 

3:42 PM

Nifty snapshot at close

3:42 PM

Sensex heatmap at close

3:36 PM

MARKET WRAP:: Sensex ends 988 points lower

-- Sensex ends 988 points, or 2.43 per cent, lower at 39,735.53, and the broader Nifty50 ends at 11,643.80, down 318 points, or 2.66 per cent.

3:31 PM

MARKET UPDATE:: Nifty Realty index tumbles 8%; DLF tanks 12%, Godrej Properties, Brigade Enterprises, Prestige Estates down 8% each

3:26 PM

Budget 2020: It lacks the punch to kick-start economic growth

There is nothing new for the markets in this Budget. The spending on rural economy, infrastructure was expected. That said, there has been some development in terms of rejigging income-tax (I-T) slabs, but I don’t know how much extra the measures will put in the taxpayers pocket. This is because a number of exemptions have been done away with. The doing away of dividend distribution tax (DDT) is a good measure from the company’s viewpoint, but the Budget has been silent on the long-term capital gains tax (LTCG). This is one thing that the markets always wanted and were hoping for this time around. READ MORE