However, the grandfathering provision of taxing long-term capital gains tax with January 31, 2018 being a cut-off date has somewhat come as a relief to investors.
Domestic sentiment was also hit after the fiscal deficit target for 2017-18 was raised to 3.5 per cent of GDP as against 3.2 per cent earlier.
After opening on a positive note at 36,048.99, the Sensex rose to 36,256.83 points during the presentation of the Budget but turned negative after Arun Jaitley announced long-term capital gains tax, hitting a low of 35,501.74.
However, it bounced back to close at 35,906.66, still down 58.36 points, or 0.16 per cent. Nifty too saw volatility and ended at 11,016.90, down 10.80 points, or 0.10 per cent. It hovered between 11,117.35 and 10,878.80 during the day.
Fiscal deficit: The fiscal deficit will overshoot to 3.5 per cent from the earlier estimate of 3.2 per cent in the current fiscal, ending March 31, said the Finance Minister Arun Jaitley. Read more
Closing bell: The S&P BSE Sensex ended lower by 58.36 points or 0.16 per cent at 35,906.66 and the Nifty closed down by 10.8 points or 0.1 per cent at 11,016.90.
Shares of agriculture-related stocks surged up to 10 per cent after Finance Minister Arun Jaitley said that Budget 2018-19 will focus on strengthening agricultural and rural economy. Read more
'Imandari Ka Utsav': Finance Minister Arun Jaitley has likened the demonetisation drive of 2016 to a celebration of honesty, saying honest taxpayers receieved the move to tame black money as ‘Imandari Ka Utsav’. Click here to read more
Dedicated fund for affordable housing: Its cheers for the affordable housing sector as the Finance Minister Arun Jaitley has announced a dedicated fund for the sector in the Union Budget. More on this
Investors will have to pay 10 per cent tax on distributed income from equity oriented mutual funds, as per the Budget proposals. Read the full story
Prime Minister Narendra Modi, has termed the Union Budget for 2018-19 “development-friendly” and said it will strengthen the vision of a ‘new India’. Click here to read the full story
The grandfathering provision of taxing long-term capital gains tax with January 31, 2018 being a cut-off date has come as a relief for the equity market. Click here to read more
In a major bonanza to farmers, Finance Minister Arun Jaitley has announced fixing support price of Kharif crops like paddy at least 50 per cent higher than the cost of production, while raising farm credit target for the next fiscal by 10 per cent to ₹11 lakh crore.
Brokers' reaction on long-term capital gains tax
“Rationalisation of LTCG as expected has arrived, though negative on sentiments but robust equity returns will absorb this 10 per cent if corporate earnings growth happen as expected,” said Kamlesh Rao, MD and CEO, Kotak Securities.
”... introduction of LTCG may disappoint equity markets to some extent. Reduction in corporate tax rates for MSME companies will bring them back on growth track,” said Anita Gandhi, Whole Time Director at Arihant Capital Markets Ltd.
“The much anticipated introduction of LTCG is now back with a new avatar. As we know in tax legislation, this could only get worse over a period of time with every successive budget diluting the original commitment of taxing long term gains,” said Milind Kothari, Managing Partner, BDO India.
“The budget has proposed a long-term capital gain tax on profits over Rs 1 lakh from equity transactions made post 31st January, 2018 at 10 percent of total gains. However, any profit made till 31st January, 2018 is exempted from LTCG.
This move was expected. Introduction of LTCG will lead to the Sensex falling at least in short term,” said Monish Panda, Founder, Monish Panda and Associates.
Imposition of long-term capital gains tax had a mixed reaction among brokers. Some expressed disappointment over the introduction of long-term capital gains tax, saying the markets may react negatively in the short-term. However, some brokers said the move will be healthy for the overall economy.
The S&P BSE Sensex was trading higher by 211.98 points or 0.59 per cent at 36,177 and the Nifty50 was up 56.3 points or 0.51 per cent at 11,084.
Boost for VC funds : Finance Minister Arun Jaitley said the government is committed to taking additional measures to further strengthen venture capital funds and the angel investor ecosystem in the country. Click here to read more
As part of divestment of public sector entities, the government will merge three general insurance firms into one and subsequently list the entity on stock exchanges. More on this
To further improve ease of doing business, the government has identified 372 action points for states which they would carry out in a “mission mode”. Click here to read more
Arun Jaitley says all crypto currencies, which include bitcoins, are illegal and the government will take all measures to eliminate their use. Read more
India is expected to register a growth rate of 7.2-7.5 per cent in the second half of the current fiscal and is on way to becoming the 5th largest economy of the world. Read more
The Sensex recovered from the day's low of 35,502 and was trading up by 110.99 points or 0.31 per cent at 36,976.01 and the Nifty too rebounded from the low of 10,888.35 and was trading up by 31.5 points or 0.29 per cent at 11,059.2.
Domestic markets crashed as soon as Finance Minister Arun Jaitley announced long-term capital gains tax of 10 per cent on gains of over Rs 1 lakh.
Domestic sentiment also took a hit after the fiscal deficit target for 2017-18 was raised to 3.5 per cent of GDP as against 3.2 per cent earlier.
The benchmark BSE Sensex recovered from the intraday low of 35,501.74 but was still trading down by 136.12 points or 0.38 per cent at 35,828.90. Similarly, the Nifty recovered from the day's low of 10,888.35, but still down by 43.9 points or 0.4 per cent at 10,983.80.
Sensex gainers and losers
Budget provides relief in corporate tax for smaller companies.
Long-term capital gains exceeding Rs. 1 lakh to be taxed at the rate of 10%: Finance Minister
The Sensex slumped over 300 points and the Nifty declined 76 points as the Finance Minister, Arun Jaitley, announced measures on rationalising long-term capital gains tax. N ifty Midcap and Small cap indices were down 1.2-1.7 per cent.
Personal Income Tax rates unchanged; Rs. 40k standard deduction in lieu of present exemption: Jaitley
No change in personal income tax rates for salaried class.
Companies with turnover of upto Rs. 250 cr to be taxed at 25%.
80,000 crore disinvestment target for 2018-19; target for 2017-18 exceeded and will reach Rs 1 lakh crore.
Tax buoyancy more than expected, thanks to greater compliance: Jaitley.
5 lakh WiFi hotspots to be set up in rural areas to provide easy Internet access.
Markets slipped into the red as the Budget proposals announced so far failed to cheer investor sentiment. The Sensex was trading down by 73.89 points or 0.21 per cent at 35,891.13 and the Nifty down 11.95 points or 0.11 per cent at 11,015.75.
Government insurance companies to be merged into a single entity, and subsequently listed in the stock exchange, as part of the disinvestment programme .
₹1,48,528 crore - capital expenditure for Indian Railways.
Markets slightly loses strength: The Sensex was trading up by 139.25 points or 0.39 per cent at 36,104.27 after hitting intraday high of 36,226.97. Similarly, the Nifty was up 34.75 points or 0.32 per cent at 11,062.45 after hitting a high of 11,102.05 earlier in the day .
BSE sectoral indices
NSE sectoral indices
National Health Protection Scheme to cover 10 crore poor and vulnerable families by providing upto Rs 5 lakh per family per year.
Finance Minister on 8% plus growth target
Stocks of housing finance companies like LIC Housing Finance, PNB Housing Finance, Dewan Housing, GIC Hosuing Finance and Can Fin Homes gained in the range of 1.8-2.4 per cent as the government proposed to set up a dedicated affordable housing fund.
The S&P BSE Sensex was up 176.24 points or 0.49 per cent at 36,141.26 and the Nifty50 up 64.15 points or 0.58 per cent at 11,091.85. Among BSE sectoral indices, capital goods index was the star-performer and was up 2.18 per cent, followed by realty 0.97 per cent, infrastructure 0.89 per cent and FMCG 0.82 per cent.
Top gainers on BSE
Top gainers on NSE
Government to double the allocation for food processing, specialized agro-processing and financial institutions to be promoted by Government.
Jaitley says MSP of crops to be increased to at least 1.5 times of the production cost.
The Sensex was trading up by 160.25 points or 0.45 per cent at 36,125.27 and the Nifty up by 43.55 points or 0.39 per cent at 11,071.25 as the Finance Minister, Arun Jaitley, started presenting the Union Budget 2018.
Cabinet approves Union Budget for 2018-19 . Follow live Budget updates
L&T hits record high : Shares of Larsen & Toubro hit a record high on strong Q3 earnings. The stock surged as much as 3.6 per cent to a record Rs 1,468. Read more
Gold prices fall : Gold prices inched down after the US Federal Reserve left interest rates unchanged but hinted at hikes later this year. Spot gold was down 0.2 per cent at $1,342.70 per ounce at 0112 GMT. Read more
Finance Minister arrives in Parliament to present the Union Budget. (Photo: Kamal Narang)
Dollar holds modest gains: The dollar kept modest gains against its peers after the Federal Reserve signalled its confidence about inflation and growth in the world's biggest economy, with traders now waiting on a host of indicators including non-farm payrolls for further catalysts. Click here to read more
Fed leaves interest rates unchanged : The Federal Reserve has left the benchmark interest rate unchanged after its first policy meeting of 2018, but said it expects inflation to move up this year - a possible signal of faster rate increases ahead. Read more
The Sensex surged over 220 points ahead of the Union Budget to be presented by the Finance Minister, Arun Jaitley, at 11 am today. The Sensex was trading higher by 223.48 points or 0.62 per cent at 36,188.50 and the Nifty up by 55.5 points or 0.5 per cent at 11,083.20.
Among BSE sectoral indices, capital goods index was the star-performer and was up 2.02 per cent, followed by consumer durables 1.2 per cent, realty 1.01 per cent and infrastructure 0.94 per cent.
Among NSE sectoral indices, realty index gained the most by 1.12 per cent, followed by IT 1.01 per cent, auto 0.56 per cent and private bank 0.53 per cent.
Day Trading Guide for Feb 1
HDFC Bank: Initiate fresh long positions with a fixed stop-loss if the stock rebound up from ₹1995 levels. Click here to read the full text
L&T Finance : The board of directors of L&T Finance Holdings has approved issue of equity shares for an aggregate consideration of up to ₹1,000 crore (inclusive of premium as may be fixed) through qualified institutional placement. More on this
Today's stock pick: Ashiana Housing (₹200)
Investors with a short-term perspective can buy the stock of Ashiana Housing at current levels. Read more
Suven shares up 1.5% : Shares of Suven Life Sciences gained as much as 1.56 per cent on Thursday as the company has received a product patent from Aripo (AP4415) and one product patent from South Korea (10-18087922) corresponding to new chemical entities (NCEs) for the treatment of disorders associated with neurodegenerative diseases.
Following a positive open at Rs 216.45 against the previous close of Rs 214.30, the stock touched an intraday high of Rs 217.65 and a low of Rs 212.50. At 9.40 am, the shares were trading up by 0.28 per cent at Rs 214.90 on the BSE.
The company said that these patents are valid through 2033 and 2034, respectively. These are being developed as therapeutic agents for major depressive disorders and are useful in the treatment of cognitive impairment associated with neurodegenerative disorders like Alzheimer’s disease, attention deficient hyperactivity disorder (ADHD), Huntington’s disease, narcolepsy, Parkinson’s and schizophrenia, respectively.
Nifty50, Bank Nifty stocks to be eyed: Traders will focus on Nifty 50 and Bank Nifty futures, which have already attracted huge open interest positions ahead of the Budget presentation. Read more
Dai-ichi Kakaria spikes : Shares of Dai-ichi Kakaria saw a sudden spurt in share price, after the Delhi High Court verdict in a Daiichi-Singh brothers’ dispute. Read more
At 9.15 am, the Sensex was up 160 points or 0.44 per cent at 36,125.02 and the Nifty was up 36.7 points or 0.33 per cent at 11,064.40.
The 30-share BSE index Sensex rose 31.55 points or 0.37 per cent to 36,096.72 and the 50-share NSE index Nifty gained 31.55 points or 0.29 per cent to 11,059.25.