Nifty closes below 24,500, Sensex nears 80,400 amid volatile trade on Budget Day

Benchmark indices Sensex and Nifty closed slightly down on Tuesday after a volatile trading session driven by the announcement of the Union Budget for 2024–25. The government proposed to hike the securities transaction tax (STT) on futures and options (F&O) trading, causing initial market jitters. The BSE Sensex recovered most of its over 1,200-point intra-day loss, closing down by 73.04 points or 0.09%, at 80,429.04. It hit a low of 79,224.32 after the finance minister's announcement. The NSE Nifty also dipped, ending 30.20 points or 0.12% lower at 24,479.05, after dropping to 24,074.20 during the day.

Sector performance

While tax exemptions and customs duty cuts boosted consumer durables and FMCG stocks, helping the market recover, significant gains were seen in Titan, ITC, Adani Ports, NTPC, Infosys, Hindustan Unilever, HCL Technologies, and Sun Pharma. Major laggards included Larsen & Toubro, Bajaj Finance, State Bank of India, Axis Bank, and HDFC Bank.

Expert opinions

"From the markets perspective, the raising of STCG (Short-Term Capital Gains Tax) to 20% and LTCG (Long-Term Capital Gains Tax) to 12.5% is a body blow. We need to brace ourselves for a negative reaction in the short term," said Sanjay Sinha, Founder of Citrus Advisors.

Budget highlights

Finance Minister Nirmala Sitharaman announced several key measures:
Income tax relief for the middle class
Rs 2 lakh crore allocation for job creation over five years
Rs 2.66 lakh crore for rural development
Continued spending on long-term infrastructure projects at Rs 11.11 lakh crore
Capital gains exemption limit raised to Rs 1.25 lakh per year
STT on F&O securities hiked by 0.02% and 0.1%
'Angel tax' abolished for all startup investors
Customs duty cuts on mobile phones and gold

Global market reactions

Asian markets had mixed outcomes, with Seoul closing higher and Tokyo, Shanghai, and Hong Kong ending lower. European markets were trading higher, and the US markets closed positively on Monday. Global oil benchmark Brent crude rose 0.25% to USD 82.63 a barrel.