MAHARASHTRA, India – The Indian stock market dramatically fell during Budget day today, with the BSE Sensex index dropping nearly 1,000 points and Nifty at odds at 11,643 levels.
Indian stocks tracked sharp declines today as the Union Budget 2020 notice failed to further boost the expectations in the market. The BSE Sensex index tracked a dramatic tumble of around 2.4%, dropping 987 points today to settle at its current 39,735 points. Further, stocks on the NSE fell considerably today. The broader Nifty50 index dropped by around 2.6% towards 11,643 points.
Among the shares on Sensex, ITC was the top laggard as it dipped by around 7% after the newly imposed increase in the excise tax on tobacco by the government. Among the top losers under the NSE includes HDFC, ICICI Bank, L&T, ONGC, IndusInd Bank, and SBI, with each stock dropping between 4% to 6%.
According to the head of research from the Geojit Financial Services, Vinod Nair, the budget is considerably under par. It comes even as the very high expectations of the market from the government as well as the apparent support that the economy is getting and the higher spending, which lacks in detail, Nair said. He also stated that the extra flexibility to the fiscal scarcity for FY20 is optimistic and extending the same amount of optimism for the FY21 would be a boost in the market’s confidence.
Today, Finance Minister Nirmala Sitharaman, revised the fiscal deficit of the country from the original target of 3.3% to its current target of 3.8%. Further, the finance minister also set the target fiscal deficit of the GDP at 3.5% for the year 2020 to 2021.
Moreover, the finance minister made further changes, including the proposed cut for the income tax rates. Further, he changed pieces to set the tac incidence a lot lower for those who are gaining profits from Rs 15 lakh per year. However, the change is only applicable to those who are willing to waive exemptions and deductions.
The chief investment strategist from Geojit Financial Services, VK Vijayakumar, also stated that the changes announced today, especially in terms of the personal income tax is marginal at best, because only those who opt out of deductions and exemptions can benefit from such. Vijayakumar further stated that abolishing the DDT would most probably be good for the market.
Elsewhere, benchmark indices on Wall Street ended Friday’s session with sharp losses. Market traders claimed that negative signals from the global market, as well as the concerns over the coronavirus outbreak in China, have also weighed in on the global investor’s sentiments.