Sensex, Nifty end sideways post Union Budget announcement

The domestic equity benchmarks ended sideways after a volatile session on Wednesday. The Nifty ended tad above 17,600 mark, after hitting the day's high at 17,972.20 in afternoon trade.

The Budget for 2023-24 was laid down in the Parliament by the Union Finance Minister. Investors cheered after the Central Government announced a slew of measures to boost capital expenditure spending in country while simultaneously providing relief to highest taxpayers, all this coupled with reigning the fiscal deficit to below 4.5% of GDP by 2025-26.

As per provisional closing data, the barometer index, the S&P BSE Sensex, advanced 158.18 points or 0.27% to 59,708.08. The Nifty 50 index lost 45.85 points or 0.26% to 17,616.30.

 

In the broader market, the S&P BSE Mid-Cap index fell 0.96% while the S&P BSE Small-Cap index declined 1.10%.

The market breadth was weak. On the BSE, 1276 shares rose and 2266 shares fell. A total of 107 shares were unchanged.

Union Budget 2023-24:

Finance Minister Nirmala Sitharaman presented the Budget 2023 today. This was the final full-fledged budget of the Narendra Modi government before the general election next year.

FM Sitharaman said fiscal deficit for 2023-24 is estimated at 5.9%. FY23 fiscal deficit is revised at 6.4% of GDP.

"I reiterate my intention to bring the fiscal deficit below 4.5% of GDP by 2025-26," FM Nirmala Sitharaman said.

FY24 gross borrowings is set at Rs 15.4 lakh crore. "Net market borrowings budgeted at 11.8 lakh crore in FY24," says Finance Minister.

Sitharaman in her Budget speech today said that India's FY23 GDP growth is estimated at 7%.

The government is increasing capital investment outlay by 33% to Rs 10 lakh crore, which would be 3.3% of GDP. This is highest ever capital outlay by India.

The government has announced capital outlay of Rs 2.40 lakh crore for railways, an increase of 9x over FY14.

The outlay for PM Awaas Yojana is being enhanced by 66% to over Rs 79,000 crore.

50 additional airports, heliports, water aerodromes, advanced landing zones will be revitalised. Cities will be incentivised to improve creditworthiness for municipal bonds. About 100 critical transport infra projects for steel, ports, fertiliser, coal, foodgrain sectors have been identified with an investment of Rs 75,000 crore including Rs 15,000 crore from private sources.

The government will extend 50-year interest free loan to State governments for one more year, FM Sitharaman said.

The government has announced Rs 35,000 crore priority capital for the energy transition. Battery storage will get viability gap funding.

The government has allocated Rs 19,700 crore to the National Hydrogen Mission. The objective is to reach hydrogen production capacity of 5 metric million tonnes by 2030.

The government will launch Pradhan Mantri Kaushal Vikas Yojana 4.0.

A one-stop solution for reconciliation & updating of identity and address of individuals maintained by various govt agencies, regulators and regulated entities will be established using DigiLocker service and Aadhaar as foundational identity.

For business establishments required to have Permanent Account Number, the PAN will be used as a common identifier for all Digital Systems of specified government agencies.

FM said 50 tourist destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism. States will be encouraged to set a 'Unity Mall' in State capital or the most popular tourist destination in the state for the promotion and sale of 'One District, One product' and GI products and other handicraft.

The Finance Minister has announced new income slabs bringing down the overall tax outgo for middle income earner group in FY 2023-24.

Rebate limit on personal income tax increased from Rs 5 lakhs to Rs 7 lakhs. The rebate will be only for those in the new tax regime.

Number of slabs reduced to 5 and tax exemption limit raised to Rs 3 lakh in new tax regime. Tax rates reduced for each slab with the highest of 30% for Rs 15 lakhs and above.

Salaried persons with income of Rs 15.5 lakhs or more will benefit by Rs 52,500 due to standard deduction.

Leave encashment limit is increased to Rs.25 lakh for retirees, up from Rs.3 lakh.

Buzzing Index:

The Nifty FMCG index rose 1.13% to 44,958.30. The index has added 1.67% in two sessions.

ITC (up 2.57%), Varun Beverages (up 2.32%), Godrej Consumer Products (up 1.8%), Tata Consumer Products (up 1.55%) and Marico (up 1.46%) were the top gainers.

Among the other gainers were Britannia Industries (up 1.24%), Dabur India (up 0.75%), Nestle India (up 0.38%), United Spirits (up 0.24%).

On the other hand, Emami (down 3.29%), Procter & Gamble Hygiene and Health Care (down 2.48%) and United Breweries (down 1.03%) moved lower.

Stocks in Spotlight:

TVS Motor fell 1.87%. The 2-wheeler maker's total sales rose by 3% in January 2023 with sales of 275,115 units as against 266,788 units in January 2022.

Tata Motors slipped 1.22%. The company announced that its total domestic and international sales for January 2023 stood at 79,681 vehicles, up by 10% compared with 72,485 units sold during January 2022. Maruti Suzuki declined 1.46%. The car major said that its total sales jumped 11.76% to 1,72,535 units in January 2023 as compared with 154,379 units in January 2022. Mahindra & Mahindra (M&M) lost 1.91%. M&&M said that its overall auto sales for the month of January 2023 stood at 64,335 vehicles, registering a growth of 37.46% as against 46,804 vehicles sold in January 2022.

Escorts Kubota fell 2.97%. The company's Agri Machinery Segment sold 6,649 tractors in January 2023, registering a growth of 16.5% as compared with 5,707 tractors sold in January 2022. Bajaj Auto shed 0.28%. The two-wheeler maker's total sales declined 21% to 2,85,995 units in January 2023 compared with 3,63,443 units sold in January 2022. Jubilant FoodWorks slumped 6.26%. The QSR chain operator's standalone net profit tumbled 35.5% to Rs 88.58 crore as against Rs 137.33 crore posted in Q3 FY22.

Coal India declined 2.05%. The company posted a consolidated net profit of Rs 7,719.11 crore in Q3 FY23 from Rs 4,556.54 crore recorded in Q3 FY22. Net sales rose to Rs 32,429.46 crore in Q3 FY23 from Rs 25,990.97 crore recorded in Q3 FY22.

Indian Hotels Company (IHCL) jumped 8.67%. The company's consolidated net profit surged 403.5% to Rs 382.71 crore in Q3 FY23 compared with Rs 76.01 crore in Q3 FY22.

Cholamandalam Investment and Finance Company surged 5.97%. The company's net profit rose 30.6% to Rs 684.29 crore on 32.4% jump in total income to Rs 3,375.01 crore in Q3 FY23 over Q3 FY22.

Global Markets:

European markets and their Asian peer traded in the green on Wednesday with investors keeping a close eye on the U.S. Federal Reserve's next monetary policy decision later today.

China's factory activity in January signaled a further contraction from previous readings, albeit at a slower pace, marking the sixth monthly contraction in a row. The Caixin manufacturing Purchasing Managers' Index for January came in at 49.2 on Wednesday, a slightly higher reading than December's 49.

Japan's factory activity logs another contraction in January, marking a third straight month of contraction. The au Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index held steady at 48.9, below the 50-point mark separating growth from contraction.

US stocks edged higher on Tuesday on the back of strong earnings and encouraging inflation data.

The Fed is expected to hike rates by one-quarter of a percentage point. Investors will be looking for clues about how much higher the central bank will take rates in the fight against inflation.

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