Benchmark indices extended gains for the second in a row on Tuesday as the lack of populist measures in the Union Budget kept the market buoyant on Tuesday. The 30-share pack Sensex rose 848.40 points or 1.46 per cent to close at 58,862.56. Its broader peer NSE Nifty advanced 237 points or 1.37 per cent to 17,576.85. Metal stocks saw massive buying as the government reiterated its thrust on infrastructure. PSU bank stocks, meanwhile, were subdued after the government did not announce any cash infusion. In the last two sessions, equity investors have become richer by Rs 6.37 crore, including Rs 3.33 lakh crore gains recorded on Tuesday.
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Wall Street starts February with higher open
The Dow Jones Industrial Average rose 19.6 points, or 0.06 per cent, at the open to 35151.47. The S&P 500 rose 4.0 points, or 0.09 per cent, at the open to 4519.57, while the Nasdaq Composite rose 37.6 points, or 0.26 per cent, to 14277.434 at the opening bell.
Given the current state of economic activities, inflation and unemployment, this budget has the perfect recipe of building a new India. The focus of the finance minister to establish a base for 25 year of upcoming growth was clearly evident. Inclusive Development, Productivity enhancement, Energy Transition and climate action were the Budget’s focal points. PM Gati Shakti was the chief driver for increasing public spending and capital expenditures. Apart from that 5G launch, reduction in import duties, lowering of company windup tenures and thrust on Agritech were key proposals for productivity enhancements.
– Vivek Bajaj, Cofounder StockEdge
The Union budget 2022-23 continued the focus on ‘quality’ expenditure and increased the capex by 35% which is ought to have a multiplier effect on the economy. Apart from public-private investments, clean energy focus is amply clear with additional allocation to Solar PLI and policy around battery swapping. Issuance of green bonds and promotion of GIFT great move to attract global investors.Overall it is a growth oriented budget and the financial numbers seems realistic (revenue nos for FY 22 are tad conservative).
– Ashish Gumashta, CEO, Julius Baer India
Rivals sharing the glory
Last month, Sterlite Technologies and HFCL butt heads in the courts and in media circles on a patent litigation. Now, they both are reaping benefits of the recent announcement by the government. Reading between the lines of Budget speech by Nirmala Sitharaman, investors rushed to buy shares of both companies. HFCL rose 6 per cent and Sterlite Tech climbed 4 per cent.
No Budget cheer for auto
When every other sector was basking in the sun of the budget announcement, it seems the euphoria was absent from auto stocks. Weaker earnings and subdued monthly sales data put pressure on them. Tata Motors was the biggest loser in the pack after reporting larger than expected loss, while M&M and Eicher Motors were other major losers. TVS Motor was the top gainer. Nifty Auto ended down 0.75 per cent.
According to Purushottam Anand, Founder of blockchain law firm Crypto Legal, taxing income from cryptocurrencies does not necessarily and explicitly legalise cryptocurrencies because income tax is not concerned about the manner or means of acquiring the income.
The budget is behind us and now 9th Februrary’22 become relevant. The commentary around RBI raising rates in its coming meeting would be that much more relevant. Having said that, in my opinion, equity markets in India are likely to see 20000 on the nifty and about 65000 in SENSEX by December 2022 on the back of 15-20 per cent earnings growth in FY23. The journey, however, is likely to be very volatile. Markets will test patience on the downside as markets adjust to higher risk premiums on the back of an impending increase in interest rates, both globally and locally. The Indian rupee is likely to depreciate which could see FII selling, particularly those names where private equity holding is high (Read consumer tech and other self-proclaimed tech companies). Sectors like infrastructure , real estate , industrials , financials ,Information technology and pharmaceuticals are likely to outperform while consumer staples and discretionary likely to underperform.
– Motilal Oswal, MD & CEO, Motilal Oswal Financial Services
How to position yourself in the market now?
— Ajit Mishra, VP – Research, Religare Broking
Digital currency explained: India catches up with global fad
Crypto or digital currencies are the latest fad across the world and India will next fiscal, beginning April 1, have its own version of the same which essentially would mirror the prevalent physical currency in digital form. The currency, called ‘digital rupee’, will be issued by the Reserve Bank in digital form and will be fungible with physical currency. The exact regulation governing this Central Bank Digital Currency (CBDC) is yet to be finalised.
Gold rallies Rs 333 on global trends
Gold in the national capital on Tuesday rallied Rs 333 to Rs 47,844 per 10 grams in line with firm global trends along with rupee depreciation, according to HDFC Securities. In the previous trade, the precious metal settled at Rs 47,511 per 10 grams. The rupee dipped 14 paise to close at 74.79 (provisional) against the US dollar.
This government has never allowed inflation to reach double digits; Inflation was above 6% for only a short span of time
– Finance Minister Nirmala Sitharaman
We will be able to achieve and exceed tax targets: FM
Spend on asset creation to generate employment, says FM
- PLI scheme to boost employement generation
- Emergy credit line helped MSMEs retail employees
Finance Minister says might do better than Budget estimates
FINANCE MINISTER SAYS:
- Did not raise taxes this year or last
- Did not try to raise money through higher taxes
- Don’t want to burden people with taxes during pandemic
Air India stake sale shows govt’s intent on disinvestment: FM
GDP in dollar terms has cross $3 lakh crore: CEA
- India could be a $5 lakh cr economy in FY26
- Expect rupee to remain stable to range
Taking away excise duty numbers, growth in revenues of 14% is not conservative: Nirmala Sitharaman
Hospitality companies under stress post Covid second wave, says FM
No tax plan for digital currency that is to be issued by the RBI yet, say FM
Talks still on regarding bond index inclusion, was not the right time to announce it
LIC IPO in all probability to go through in FY22: FM
- Should not conjecture on size of LIC IPO based on downward revision of divest target FY22
- Have been realistic about divestment targets
It is a long-term growth oriented budget which the market has welcomed given no headroom for cautiousness & populist measures. It is expected to support growth in the future; however, it is missing some balancing measures in context of current inflationary & slowing economy. Supportive measures were needed for rural, agriculture, low taxpayers & for sectors impacted by the pandemic. High capex, fiscal deficit & borrowing plans in the background of a high inflation, commodity & oil prices and rising interest rates will be challenges in the short to medium-term.
– Vinod Nair, Head of Research at Geojit Financial Services
Tech Mahindra on Tuesday said its consolidated profit after tax (PAT) rose 4.5 per cent year-on-year (YoY) to Rs 1,369 crore. Sequentially, the profit was up 2.2 per cent, the IT firm said in a BSE filing. Revenue for the quarter came in at Rs 11,451 crore, up 18.7 per cent YoY (or up 5.2 per cent sequentially). Revenue in dollar terms rose 4.1 per cent sequentially to $1,533.50 million. In constant currency terms, the top-line growth was up 4.7 per cent sequentially.
The Union Budget with its big tech push and capex thrust has used the fiscal space arising out of buoyant tax collections to spur growth and revive private capex. The street cheered the budget as Indices rose 1.5% with its usual share of volatility as India VIX dropped sharply below 20. The paradigm change seen in the digital push together with the narrative for urban development quite clearly signalled a pro-growth stance.
– S Ranganathan, Head of Research at LKP securities
Top gainers & losers in today’s trade
Price as on 01 Feb, 2022 03:45 PM, Click on company names for their live prices.
Sector Watch | PSU Bank, Auto indices in the red
Sensex Heatmap: Only 7 stocks close in the red
How Nifty moved on Budget day
CLOSING BELL: Sensex soars 848 pts on volatile Budget Day; Nifty near 17,600; Tata Steel, Sun Pharma rally 7% each
Budget brings in new hopes, says PM Modi
“This budget brings in new hopes and opportunities for the people. It strengthens the economy; it’s full of ‘more infrastructure, more investment, more growth and more jobs’. There is also a new provision of green jobs; budget ensures a bright future for youth,” said PM Modi.
For the next financial year, the target is Rs 65,000 crore.
That raises the question about whether the government has downgraded expectations from the IPO of Life Insurance Corporation of India, is staggering the share sale, or is merely being conservative with estimates until the money is actually raised. The IPO is expected “soon,” Finance Minister Nirmala Sitharaman said in her budget speech, without elaborating.
Nifty Metal index surges over 4%
Top gainers on Budget Day
Price as on 01 Feb, 2022 02:51 PM, Click on company names for their live prices.
Volatility high on Street as Sensex again surges 900 points after slipping into the red
Global Market Check: European stocks off to firm start
- European stocks are trading higher with all the top regional bourses in positive territory, rebounding from a gloomy January, after some optimism from the U.S. boosted global equities.
- After hitting its worst month since late-2020, the pan-European STOXX 600 index has jumped to a 12-day high, up 1.2%, with financial services, tech and basic resources leading the gains all up between 2.5% and 2%.
Sharp rally in Tata Steel stock
While the recognition of the startup ecosystem’s contribution in the budget speech was welcome, I am quite disappointed that the Govt hasn’t done more to rationalise the taxation between listed and unlisted investments – that would have encouraged more participation of investors in the ecosystem. Alternatively, the Govt should have provided tax benefits for making investments in the startup space, which although riskier than the listed space, but are critical for the nation as recognised by the hon’able FM in her speech: Anirudh. A. Damani, Managing Partner, Artha Venture Fund
30% tax on income from virtual digital assets, while high, is a positive step as it legitimizes crypto and hints at an optimistic sentiment towards further acceptance of crypto and NFTs across stakeholders in the country. The government has come a long way in its stance towards crypto from last Feb to today and we are confident that this will herald a new era of growth and innovation for India in a Web 3.0 world.
– Avinash Shekhar, CEO, ZebPay
Very happy yo see that cryptos will be charged at a flat 30% tax. Its a win win situation! Investors should now not… https://t.co/Pyjcp9rnCV
— Rachana Ranade (@rachana_ranade) 1643699919000
In the Finance Bill tabled in the Parliament, the government defines virtual digital assets as:
- any information or code or number or token (not being Indian currency or foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme; and can be transferred, stored or traded electronically
- a non-fungible token or any other token of similar nature, by whatever name called
- any other digital asset, as the Central Government may, by notification in the Official Gazette specify
Pandemic disruption poses risk to India’s FY23 fiscal deficit, says Moody’s analyst
- Ongoing disruption from the COVID-19 pandemic poses a risk to India’s fiscal deficit target for 2022/23, a Moody’s analyst said on Tuesday, after the government presented its federal budget to support economic growth.
- India’s Finance Minister Nirmala Sitharaman set a fiscal deficit target of 6.4% of GDP for the year ending March 2023. For the current year, she estimated a fiscal deficit of 6.9%, slightly above the 6.8% it had budgeted.
Nomura on India Budget
— Dr. Aurodeep Nandi, India Economist and Vice President at Nomura
Budget 2022: No increase in taxes of cigarettes, tobacco products; ITC jumps 3%
Price as on 01 Feb, 2022 02:05 PM, Click on company names for their live prices.
Overall, a very consistent and simple budget with 100% directional alignment to last year’s budget focus on building trust. This shows the long term focus of the government versus too many changes whilst keeping the option of announcing reforms throughout the year. No one can complain that commitment to predictability, reducing ambiguity and litigation has not remained a steady focus.
– Vishesh C. Chandiok, CEO, Grant Thornton Bharat
Capital Markets love a budget big on spending, and the budget 2022-23 has delivered on this front! 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
Sensex regains lost mojo, trades 600 points higher
Rupee reverses gains, trading 22 paise lower at 74.87 post Budget speech
The rupee pared its initial gains and was trading 22 paise lower at 74.87 against the US dollar on Tuesday, even as the domestic equity market was trading with significant gains. Investors were cautious after Finance Minister Nirmala Sitharaman on Tuesday said that the fiscal deficit in 2021-22 will be 6.9 per cent of GDP and 6.4 per cent in 2022-23, forex traders said.
This is a risk-taking budget. It is a charge for investment. It is not populist budget. There has not been a huge amount of giveaways as I and some others might have thought. The government has decided that they are going to take the risk of inflation. We are not going to go for fiscal consolidation. We are not going to worry about that. We are going to have a charge of investment, capital expenditure of 35%.
Sometimes boring is good- From a market, investor/trader standpoint nothing has changed so this will largely play out as a nonevent 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.
– Nikhil Kamath, Co-founder, True Beacon and Zerodha
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.
– Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services
Nifty turns volatile, along expected lines, on Budget day
The market has a history of trading in a wide range on Budget days. This has been true for the last couple of years.
Sensex off day’s high, wipes off 700-point gain
Budget Fineprint: FY23 gross market borrowing pegged at Rs 14.95 lakh crore
- FY23 net borrowing seen at Rs 11.09 lakh crore
- FY23 asset sale target of Rs 65,000 crore
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.
– Pranay Bhatia, Partner and Leader – Tax and Regulatory Services, BDO India
Unblended Fuel to attract additional excise duty of Rs 2 per litre. This would encourage ethanol blending of fuel; positive for sugar companies: ICICI Direct
Price as on 01 Feb, 2022 12:58 PM, Click on company names for their live prices.
Introduction of taxation on transfer of Virtual digital asset is a welcome move and will give upfront clarity to the investors on how their income would be taxed: Anish Shah, BDO India LLP
Issue of Green Bonds will enable the viability gap funding needed for achieving the 500 GW RE energy target by 2030
– Saket Mehra, Partner, Grant Thornton Bharat
Highlights from Budget
- Emergency credit line guarantee scheme for small and medium sized businesses to be extended to March 2023
- Energy transition and climate action will be a major government priority
- Public issue of Life Insurance Corporation expected shortly
- Special Economic Zones Act to be replaced with new legislation
- To amend bankruptcy code to speed up resolution process
- Aims to lower winding up of companies to 6 months from 2 years currently
- Govt committed to reducing defence imports
- 5G spectrum auctions to be conducted in 2022
- Scheme for design-led manufacturing for 5G will be part of production-linked scheme
- To award contracts to lay optical fibre in rural areas, completion in 2025
- 480 billion rupees set aside for affordable housing in 2022/23
- Domestic scheme introduced to reduce dependence on oilseed imports
- Fund with blended capital raised under co-investment model to finance agriculture startups
- Railways to develop infrastructure for small farmers in 2022/23
- 400 energy efficient trains to be manufactured over next three years
- National highways network to be expanded by 25,000km in 2022/23
- Highways expansion to cost 200 billion rupees in 2022/23
- India budget: to bring out battery swapping policy
- Any income from transfer of virtual digital assets to be taxed at 30%
- RBI to introduce digital currency in FY23