Equity benchmarks Sensex and Nifty ended on a mixed note on Wednesday as the euphoria about the Budget fizzled out, with investors going for profit-taking ahead of the Fed interest rate decision.
The 30-share BSE benchmark Sensex climbed 158.18 points or 0.27 per cent to settle at 59,708.08 after it trimmed most of the intra-day gains. During the day, it had zoomed 1,223.54 points or 2 per cent to 60,773.44.
In contrast, the broader NSE Nifty declined 45.85 points or 0.26 per cent to end at 17,616.30.
"A well-tuned budget with strong emphasis on consumption and capex has lifted optimism in the market; however, volatility sparked in the latter half as focus shifted back to the Adani saga and FOMC meeting.
"Life insurance players witnessed heavy selling as the budget pushed for the new tax regime, making insurance products less appealing as a tax-saving tool," said Vinod Nair, Head of Research at Geojit Financial Services.
Stock markets have reacted well to the provisions immediately due to absence of any major unexpected negatives and adherence to fiscal prudence, said Dhiraj Relli, MD and CEO, HDFC Securities.
Budget 2023: For start-ups, tax holiday extended till March 2024, National Data Governance policy & moreFM Nirmala Sitharaman proposed providing the benefit of carrying forward of losses on change of shareholding of start-ups to ten years of incorporation
The markets will now look forward to the other triggers—the US Fed meet outcome, RBI's next MPC meeting and the balance Q3 corporate results, he added.
"In a nutshell, I would state this budget to be prudent, progressive and pragmatic," Relli noted.
From the Sensex pack, ITC, Tata Steel, ICICI Bank, Tata Consultancy Services, HDFC, HDFC Bank and Kotak Mahindra Bank were the major gainers.
On the other hand, Bajaj Finserv, State Bank of India, IndusInd Bank and Mahindra & Mahindra were the prominent laggards.
"Overall, the budget is excellent. The absence of negative news is a tremendous source of optimism. And the stock market has been ecstatic about this budget," said Sunil Damania, Chief Investment Officer, MarketsMojo.
Budget 2023: Capital gains benefit in property deals capped at ₹10 crorePrimary objective is to mitigate housing shortage, not promote deductions for high-value buys, says FM
Finance Minister Nirmala Sitharaman on Wednesday tweaked the slabs to provide some relief to the middle class by announcing that no tax would be levied on annual income of up to Rs 7 lakh under the new tax regime.
She also allowed a Rs 50,000 standard deduction to taxpayers under the new regime, where assessees cannot claim deductions or exemptions on their investments.
"The government's relief on personal income tax by providing rebate upto Rs 7 lakh and making changes in the slab rate under the new income-tax regime comes as a major boost to the Indian markets. The FM did not tinker with the capital gains which has cheered the markets," said Sanjay Moorjani, Research Analyst, SAMCO Securities.
Meanwhile, an overall positive trend in the global markets also cheered investors.
Elsewhere in Asia, equity markets in Seoul, Tokyo, Shanghai and Hong Kong ended in the positive territory.
Equities in Europe were trading in the green during mid-session deals. Markets in the US had ended with gains on Tuesday.
Budget 2023: Maturity proceeds of life policies with annual premium of over ₹5 lakh to be taxed: FMThe new measure not affect policies issued till March 31, 2023 and tax exemption provided to the amount received on the death of a person insured
"India Budget 2023 has offered a multi-dimensional view. The 3 Cs which stand out are -- capex increase, consumption boost, capital gains tax status quo. Mindful of the fact that there is hardly any space for fiscal expansion, FY24 fiscal deficit is pegged at 5.9 per cent and expected to see progressive reduction by FY 2026.
"Clearly a bull's-eye budget satisfying most strata of the society and of course a thumbs up from the market as well," said Lakshmi Iyer, CEO-Investment Advisory, Kotak Investment Advisors Ltd.
Sitharaman on Wednesday announced hiking the capital expenditure by 33 per cent to Rs 10 lakh crore for infrastructure development for 2023-24, which will be at 3.3 per cent of the GDP.
"A 33 per cent increase in capital expenditure to Rs 10 lakh crore, the highest ever, will go a long way in building roads, ports, and airports -- crucial for making India a reliable investment destination. Investment of Rs 2.4 lac crore in Railways is commendable," said Anand Rathi, Founder & Chairman, Anand Rathi Group.
Sitharaman on Wednesday listed seven priorities of Union Budget 2023-24, including infrastructure, green growth, financial sector and youth power.
She said four transformative opportunities can be used in Amrit Kaal for enhancing economic empowerment.
"In keeping with its focus on inclusive growth, the Union Budget has hiked outlays on infrastructure and agriculture which in our view would have a force multiplier impact on the economy," S Ranganathan, Head of Research at LKP Securities, said.
International oil benchmark Brent crude dipped 0.05 per cent to USD 85.42 per barrel.
Foreign Institutional Investors (FIIs) offloaded shares worth a net Rs 5,439.64 crore on Tuesday, according to exchange data.