Sensex ends below 36000, Nifty marginally lower as LTCG tax proposed

From impact of budget 2018 on the market to stock movements, all that happened in the market today

3:54 PM

Views on LTCG by Aashish Somaiyaa, MD & CEO, Motilal Oswal AMC

 

Equity markets were keeping fingers crossed for imposition of Long Term Capital Gains tax, which has finally come. Having STT and LTCG both is unfair when former was levied expressly in lieu of latter. Happy with the 10% LTCG tax on MFs & the 10% tax on dividends this move will reduce churn and mis-selling. 

 

LTCG implementation is at least well thought out; no disruptive impact. Therefore, over a period of time this tax incidence will be taken in stride and normal life will continue as far as investments in equities is concerned. 10% is modest and grandfathering earlier gains is a positive. It is not a big negative and markets should eventually digest it

3:46 PM

Market rundown by Jayant Manglik, President, Religare Broking

 

The much-awaited Union Budget turned out to be a balancing act, pleasing some and disappointing others. The announcement of long term capital gains on equity investments combined with possible slippage in meeting fiscal deficit target dampened the sentiment. Personal income tax too should have been addressed, or at least the slabs indexed to inflation. The focus on Bharat as well as farmers was expected and necessary.

 

We might see an overhang of this event for next couple of sessions and then focus will return to earnings. Signals are in the favor of consolidation in the index while profit taking may continue on the broader front. We reiterate our bullish yet cautious stance and suggest preferring index majors for trading

3:39 PM

Top Sectoral loser: Nifty pharma

3:37 PM

Sectoral Trend

3:36 PM

Sensex top gainers and losers

3:34 PM

Market at close

Benchmark indices ended marginally lower after the government imposed a long-term capital gains tax. Budget 2018 has proposed to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares.

 

The S&P BSE Sensex ended at 35,906, up 58 points while the broader Nifty50 index settled at 11,016, up 10 points.

3:20 PM

With LTCG, free ride for markets is over, says Andrew Holland

 

The main focus of Finance Minister Arun Jaitley, while presenting the Budget 2018, has been on the rural sector and infrastructure development. This was expected from the government in its last full Budget ahead of the general elections scheduled in 2019. 

 

The assumptions on tax revenues going ahead are reasonable and not aggressive given that the taxpayer base will increase. That said, the fiscal deficit at 3.3% of the GDP (gross domestic product) for 2018–19 is still a challenge. The economy needs to be firing on all cylinders to achieve the set fiscal deficit target. The bond yields are now nearing 7.5%. This clearly indicates that there will be challenges in meeting the fiscal deficit target. READ MORE

3:12 PM

Railway, infrastructure related stocks trade mixed post Budget

 

Shares of railway and infrastructure related companies were trading mixed after Finance Minister Arun Jaitley presented the Budget for the financial year 2018-19 in Parliament on Thursday.

 

Titagarh Wagons, Kernex Microsystems (India) and Stone India were down 5% each on BSE. GMR Infrastructure, IL&FS Engineering and Construction Company, GVK Power & Infrastructure, Larsen & Toubro (L&T), Siemens, Hind Rectifiers and Zicom Electronic Security Systems were trading higher by up to 9%. READ MORE

2:58 PM

LTCG in Budget 2018: Investing in mutual funds? Look at growth schemes

 

A 10% long-term capital gains (LTCG) tax has not upset the mutual funds industry. Sector officials say that the move will not have any major impact on current inflows in equity and that it will settle down fast. According to them, growth schemes will be more looked for going forward against dividend-paying schemes.  

 

According to the Finance Bill 2018, "With a view to providing a level playing field between growth-oriented funds and dividend paying funds, in the wake of new capital gains tax regime for unit holders of equity oriented funds, it is proposed to amend the said section to provide that where any income is distributed by a Mutual Fund being, an equity oriented fund, the mutual fund shall be liable to pay additional income tax at the rate of 10% on income so distributed." READ MORE

2:52 PM

First impression on Budget 2018 from  Devam Modi, Director of Equirus Securities

 

There has been a clear attempt to help the farmer, common man and SMEs with various populist schemes. Crucial rural impetus along with continued allocation to infra and a heavy focus on health care. We would have liked to see measures related to IBC or resolution of corporate credit stress. The fiscal deficit miss was broadly expected but is being considered a tad higher. 

 

Going ahead, the market is more exposed to a commodity spurt and resultant inflation given the populist focus related to agriculture. We do not see chances of rate cuts or yield moderation and remain positive on pockets related to domestic rural, infra and health sectors. Given the combination of elevated valuations and high growth potential, we think there will be a skewed reward for companies who are able to deliver steady growth.

2:42 PM

India bonds slump as government raises deficit target

 

India’s benchmark 10-year bonds slumped on Thursday after the government set a higher-than-expected fiscal deficit target for the year starting in April.

 

The yield for the benchmark 10-year bond rose 9 basis points to 7.50% after the deficit forecast. It had closed at 7.43% on Wednesday.

2:41 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,004.40	+39.38	+0.11
S&P BSE SENSEX 50	11,518.36	+11.48	+0.10
S&P BSE SENSEX Next 50	35,690.14	-123.48	-0.34
S&P BSE 100	11,422.44	+3.37	+0.03
S&P BSE Bharat 22 Index	3,860.49	+16.26	+0.42

2:39 PM

Quote on Budget

 

Hemang Jani, Head Equity Sales & Advisory, Sharekhan

 

No major disappointment in the budget proposals. On overall basis Long term capital gains tax doesn’t look dampening and revenue growth assumptions are looking realistic. Investors should focus on sectors/stocks having agri or rural theme. Escorts, Ashok Leyland, M&M, PI Inds and UPL will be positive. 

 

Other picks: Apollo Tyre: Raise in custom duty on truck bus radial tyres from 10 to 15 percent to benefit the company 

 

ITC: No increase in tax rates on Cigarettes – Qtrly nos have been in-line. 

2:28 PM

Insurance shares soar as FM proposes National cover plan

 

Shares of companies engaged in insurance business such as SBI Life Insurance, ICICI Prudential Life Insurance Company (ICICI Pru) and HDFC  Standard Life Insurance Company have rallied by up to 9% on BSE in intra-day trade after the government proposed a national health protection scheme to benefit 100 million poor families in the Union Budget 2018-19.

 

To provide Rs 500,000 per family annually for medical reimbursement under National Health Protection Scheme, the finance minister says the plan will protect 500 million poor people and will be world's largest health protection scheme. READ MORE

2:22 PM

India bonds slump as government raises deficit target

 

India’s benchmark 10-year bonds slumped on Thursday after the government set a higher-than-expected fiscal deficit target for the year starting in April.

 

The yield for the benchmark 10-year bond rose 9 basis points to 7.50 percent after the deficit forecast. It had closed at 7.43 percent on Wednesday.