Share Market on Budget 2022 Highlights: Domestic markets saw a volatile Budget day trade but bulls asserted control and closed in the green. S&P BSE Sensex rose 848 points or 1.46% to settle at 58,862 while NSE Nifty 50 index closed 237 points or 1.37% higher at 17,576. Bank Nifty soared 1.4% and broader markets closed with gains. India VIX, the volatility gauge, slipped 8.97% on the closing bell. Tata Steel was up 7.5% while Sun Pharma was up 6.94%, followed by IndusInd Bank, Larsen & Toubro, and Ultratech Cement. Mahindra & Mahindra was the top drag, down 1.3%. Power Grid Corporation, State Bank of India, and NTPC were the other top laggards.
Budget 2022 Share Market Live: Impact of Budget on Share Market Live News, Budget 2022 Share Market Live News
Dalal Street cheered Union Budget 2022 presented by the Finance Minister earlier today. Headline indices and broader markets dipped post FM’s speech but the dip was bought by investors helping Sensex, Nifty close near day’s high. S&P BSE Sensex zoomed 848 points or 1.46% to settle at 58,862 while NSE Nifty 50 index closed 237 points or 1.37% higher at 17,576. Tata Steel was up 7.5% while Sun Pharma was up 6.94%, followed by IndusInd Bank, Larsen & Toubro, and Ultratech Cement. Mahindra & Mahindra was the top drag, down 1.3%. Power Grid Corporation, State Bank of India, and NTPC were the other top laggards.
Sensex was above 58,850 and the Nifty was nearing 17,600 with minutes left before the closing bell.
“A Pro-India Budget with huge Capex thrust that will have a multiplier effect coupled with a big tech push and productivity boost through digital infrastructure. The budget ushered in a paradigm change towards housing and urban development while using the fiscal space created out of buoyant tax collections towards financial inclusion,” said S Ranganathan, Head of Research at LKP securities.
The fear gauge of domestic markets gave up 20 levels on Tuesday as the index tanked 9% during the day.
“Natural farming to be promoted along the banks of river Ganga. Aim at making river Ganga chemical-free,” said Prime Minister Narendra Modi.
“Vande Bharat, Digital currency, national health digital ecosystem, and other plans rolled out in Budget will benefit all classes of the society,” Prime Minister Narendra Modi said.
“As against a total expenditure of Rs 34.83 lakh crore projected in the Budget Estimates 2021-22, the Revised Estimate is Rs 37.70 lakh crore. The Revised Estimate of capital expenditure is Rs 6.03 lakh crore. This includes an amount of Rs 51,971 crore towards the settlement of outstanding guaranteed liabilities of Air India and its other sundry commitments,” said Finance Minister Nirmala Sitharaman said.
“The equity markets were cheerful on the announcement of huge outlay of capital expenditure in overall infrastructure development. This Union budget will also lay the foundation for economic growth through public investments as India emerges from a pandemic induced slump. Some sectors which get a boost seem to be banking & financial services as a proxy for credit growth & capex, real estate proxy plays like building materials including cement, capital goods, automation, digital focused IT companies, technology, consumption,” said Devang Mehta, Head – Equity Advisory, Centrum Wealth.
Nifty PSU Bank was back in the green, gaining 0.32% on Tuesday with less than an hour left before the closing bell. Canara Bank was up nearly 3%, followed by Bank of India. SBI was down 0.42%, up from the intraday lows.
“Sometimes boring is good, from a market, investor/trader standpoint nothing has changed so this will largely play out as a non-event for the stock markets. It is a positive step to see that this budget will take steps to regulate virtual currency. While how this will be implemented will determine if establishing a CBDC will result in less expensive currency management and a boost to the economy as a whole. International cues have been positive over the last 2 days, and we seem to be following them for now.
As a co-founder of GIFT City’s first AIF – True Beacon Global, along with Richard Pattle. The government’s focus to develop the SEZ is a positive step. This will bolster foreign investments,” said Nikhil Kamath, Co-founder, True Beacon and Zerodha.
The general expectation from the budget was growth over fiscal consolidation. The budget announcements are in line with these expectations. But that is leading to higher-than-expected fiscal deficit guidance for FY22-23. The lack of any specific measures on the inclusion of Indian bonds in the MSCI is a disappointment and will adversely impact flows as well as the sentiment. A moderate divestment target and higher gross market borrowing (Rs 14.95 lakh crores) will hurt bond investors.
Overall, the budget, despite being devoid of several big bang announcements, firmly focuses on aiding economic growth.
~ Roopali Prabhu, CIO and Co-head P&S, Sanctum Wealth
The government could have given further boost to the housing sector given the strong multiplier effect the sector has on the economy. The sector would have benefitted immensely by demand boosting tax benefit measures. The housing sector has made a substantial recovery from the pandemic lows and due attention here would have gone a long way in sustaining the growth momentum. Shishir Baijal, Chairman and Managing Director, Knight Frank India
Nifty is holding above the resistance of 17,500 after an intraday price shakeout. FII’s had sizeable shorts in Index – can trigger short-covering rally.
Global markets are positive, expect Nifty to follow suit.
Expect Nifty to test target two of 17,780 & target three of 18,000
~ Rahul Sharma, Director & Head – Research, JM Financial Services Ltd.
S&P BSE PSU Index was down 1% on Tuesday. HPCL, BPCL, and Indian Oil was down in the red.
“Equity markets would be happy from expectations of higher corporate earnings. Fiscal Deficit targeted at 6.4% is broadly in-line with expectations, though a large borrowing target may be a concern for bond markets. Despite the popular expectation of tax concessions for middle-class income-tax payers to push higher domestic savings, this budget has been different in not changing tax rates or slabs. Taxation on gains from the digital asset will help curb speculation and should help channelize savings into well-regulated long-term investments like Mutual Funds,” said Vishal Kapoor, CEO, IDFC AMC.
Midcap and Smallcap indices soared higher on Tuesday after having fallen earlier in the day. Nifty Midcap 50 was up 0.58% and Nifty Smallcap 50 was up 0.34%.
“The higher capital spends will eventually flow into the hands of all economic activity participants, including the private corporate and their workforce. The higher government spending, measures, ease of doing business, and “Make in India” theme will help kick-start a broader private capex cycle,” said Nitin Sharma, Director, Research & India Site Head, Fidelity International.
“A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the Production Linked Incentive Scheme,” FM Sithraman said.
Auto stocks were down in red on Tuesday as investors reacted to the Union Budget. Tata Motors was down 2.3%, followed by Ashok Leyland, Eicher Motors, Maruti Suzuki. The nifty Auto index was down 0.83%
“The Budget is growth-inducing and does the heavy lifting by sharply increasing capital expenditure. The focus on boosting manufacturing as well as an underlined emphasis on areas such as startups, modern mobility and clean energy, shows the FM has prioritised long-term growth. Individual taxpayers may feel a bit disappointed with the lack of direct tax cuts but this Budget lays the ground for a multi-year growth boom. The FY23 fiscal deficit has come in higher than expectations. Let’s hope the interest rates and inflation do not remain high for long,” said Dhiraj Relli, MD & CEO, HDFC Securities on Budget 2022.
Oberoi Realty, DLF, Godrej Properties, and other realty stocks came off day’s high after Union Finance Minister Sitharaman announced an allocation of Rs 48,000 crore under PM Housing Scheme. The allocation has been made for completion of 80 lakh homes under the Pradhan Mantri Awas Yojana (PMAY). Nifty Realty index was up nearly 1 per cent at 484.90 levels, as against the day’s high of 491.15. Barring Phoenix Mills, all the stocks on Nifty Realty pack including Oberoi Realty, Brigade Enterprises, Sobha, among others were trading in the green.
“The Productivity Linked Incentive in 14 sectors for achieving the vision of AtmaNirbhar Bharat has received excellent response, with potential to create 60 lakh new jobs, and an additional production of ` 30 lakh crore during next 5 years,” said Finance Minister Nirmala Sitharaman.
Capital Markets love a budget big on spending, and the budget 2022-23 has delivered on this front! Capital expenditure of Rs 7.50 lakh crore, a 35% increase from last year, is a significant long-term positive. We see an increase in expenditure on housing to the tune of Rs 48,000 crore will boost affordable housing. We believe infrastructure will perform well, clearly because of the great impetus. Cement and Metals should also start picking up. Banking should see improvement in the forthcoming quarters, with GDP growth aiding credit growth
~ B Gopkumar, MD & CEO, Axis Securities.
The Budget seems to be focused on high impact areas and accelerating the capital expenditure cycle. Setting Capital Expenditure target of Rs. 7.5 Lac Crores, increase of 35% vis-a-vis FY22 is a major shot in the arm for the Infrastructure sector and certainly much higher than market estimates. It is pertinent to note the reference towards investments into capacity building initiatives within the Infrastructure sector for much-needed skill upgradation pertaining to Project Appraisal, Planning, Design and Project management including Technical and knowledge assistance coming from multilateral funding agencies. This certainly suggests a reorientation of focus towards much-needed planning, monitoring and supervision of the massive investments being planned and not just splurging towards unleashing the Capital Expenditure cycle,” said Sandeep Upadhyay, Managing Director – Infrastructure Advisory, Centrum Capital Limited
Nifty PSU Bank was down 2.62% on Tuesday as public bank stocks fell after the Union Budget.
Sensex was dancing between gains and losses on Tuesday, soon after the Union Budget.
Sensex was down from highs, but still in the green. The index was up nearly 300 points hovering around 58,300 while the Nifty 50 index was around 17400.
“Overcoming the temptation to garner some votes through populist proposals, the finance minister has presented a visionary economic document to boost economic growth. By increasing the capex by 35.4% to 7.5 lakh cr thereby targeting an effective capex of 10.7 lakh cr, the government has declared that it would be doing the heavy lifting to achieve 8 to 8.5 % GDP growth in FY 23. The government has balanced growth with welfare programs for the poor with Rs 48000 cr PM Awas scheme and Rs 60000 cr for tap water for the poor 3.8 lakh households. In brief, a non-populist growth oriented budget,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The government has set the divestment target at Rs 65,000 crore for the financial year 2022-23.
The Finance Minister today announced measures to promote 'Atmanirbhar Bharat' in the defence sector and reduce the dependence on imports. Hindustan Aeronautics was down 0.45%, Mazagon Dock was up 2.2%.
“Announcement of the Digital Rupee is one of the most awaited announcements. It is important to understand how other Crypto assets will be taxed and whether there will be any specific benefit given to the Digital Rupee. With no deduction for cost, tax rate at 30%, tax on mining/gifting and no offset of loss against income from other sources, the FM has announced the much-needed clarity on crypto transactions. However, tracking such transactions in the absence of a central regulator may be challenging,” said Pranay Bhatia, Partner and Leader – Tax and Regulatory Services, BDO India.
The Nifty Metal index was up 1.91% on Tuesday as investors cheered the Union Budget. Tata Steel, Vedanta, Jindal Steel, and SAIL were among some of the gainers.
“Very pleased to see Capex, with pandemic getting over we can see a boost in the economy that was missing earlier,” said market expert Madhu Kela in an interview with CNBC TV18. He added that the government has delivered on all accounts. “There is a continuation of Capex, support to startup system and clear emphasis on technology, he added.
“Stress on the credit side will come down as growth picks up, I think banking will benefit as credit costs improve,” said Raamdeo Agarwal, Chairman of Motilal Oswal Group. Talking to CNBC TV18, he added that the total tax collection of the government can be higher.
Sensex was up more than 900 points and holding gains as Dalal Street cheered Finance Minister's Union Budger speech. Sensex touched 59,000 and was hovering between 58,900 and 59,000. Nifty regained 17,600.
“Unblended Fuel to attract additional excise duty of Rs 2 / litre. This would encourage ethanol blending of fuel. Positive for Sugar companies,” said ICICI Direct. Shree Renuka Sugars was up 0.61%, Dhampur Sugar Mills was, however, down 0.7%.
“What we need is increased Capex and everyone was looking forward to that. FM has emphasized on Gati shakti. ” said Deepak Parekh Chariman HDFC. He added that the government has strong revenues and taxes have not been increased.
ICICI Direct said that the reduction in import duty on cut and polished diamonds from 7.5% to 5% will be positive for the gems and jewelry sector. Titan was up 0.77%.
“Higher than expected fiscal deficit to keep pressure on G-Sec yield thereby impacting treasury profits of PSU banks,” said ICICI Direct. Nifty PSU Bank index was down 1.82%.
The Finance Minister in her Union Budget has capped the Long Term Capital Gains Tax at 15%.
“As a foreign entrepreneur working in India and co-founder of one of the first funds in GIFT City – True Beacon Global – I am delighted with the focus of Narendra Modi's government to develop the SEZ. This will further develop the ecosystem into a world-class fintech hub. Along with my co-founder, Nikhil Kamath, we are confident this announcement by the FM will further accelerate the international investor trust and attract further capital one of the fastest growing economies in the world.” Says, Richard Pattle, Co-founder and CEO True Beacon Global.
State Bank of India was the top laggard on Sensex, down more than 1%, accompanied by Power Grid Corporation, Dr Reddy's, Maruti Suzuki India, Bharti Airtel, and Mahindra & Mahindra.
“Presently, tax deduction u/s 80CCD(2) for employers' contribution to employee's NPS account is capped at 14%, whereas for other employers, the deduction is capped at 10% of salary. In order to bring parity between central and state government employees, it is proposed in the Budget to increase the rate of deduction to 14% of salary even for state government employees. For non-government employers, the limit of 10% remains,” said Shailesh Kumar, Partner, Nangia Andersen LLP.
Sun Pharma was the top Sensex gainer on Tuesday, up 5.6%, followed by Tata Steel, IndusInd Bank, ICICI Bank, and HDFC.
India VIX, the volatility gauge of domestic markets, was down 3.26% on Tuesday, sitting near 21.2 levels.
GST Collection in the month of January came in at Rs 1.41 lakh crore, highest since the inception of the tax.
The announcement for a Digital Rupee shows the Government of India’s recognition of blockchain technology. While it is not clear what will be the fate of private cryptocurrencies, the RBI-issued Digital Rupee will open a whole new front in currency management. This move is in sync with how other nations, such as China, England, etc. are moving. To be introduced in F22-23, more details are expected on how it will be working.
~ Amit Agarwal, Partner, Nangia Andersen LLP
“Giving a boost to the EPC sector, where projects are generally executed through consortiums, reduced rate of surcharge of 15% is proposed for such consortiums taxed as Association of Person, as against original surcharge rate of 37%,” said Shailesh Kumar, Partner, Nangia Andersen LLP.
Initial success of PLI Schemes is evident from the excellent response across sectors, and the 66 lakh additional jobs created Krishan Arora, Partner and IDT expert, Grant Thornton Bharat
