Sensex and Nifty-50 showed disapproval as the Union Budget 2020 failed to enthuse the stock market.
By Vivek Kumar
On one hand, where Finance Minister Nirmala Sitharaman gave taxpayers a choice to go for an alternate tax system, on the other hand, the union budget 2020 has left trade investors disappointed after the stock market tumbled by nearly 1000 points.
Stock markets opened the budget day trading in the red. Sensex ended 988 points or 2.43 per cent lower at 39,735.53 whereas the NSE’s Nifty 50 finished 318 points or 2.66 per cent lower at 11,643.80 points.
Almost all the indices were down on trading Saturday. Despite favourable tax rates for the power sector, the power sector index fell down by almost 3 percent on BSE.
Realty sector index suffered the most as it slumped by 7.82 per cent.
Manufacturing also fell by around 2.72 per cent. ITC, Tata Motors and L&T were among the major losers on the NSE, shedding more than 6 per cent each.
Despite the government’s allocation of Rs 22,000 crore for renewable energy, the energy sector index fell by around 2.33 per cent.
BSE Infrastructure index fell by 3.80 per cent despite government pushing in on National Infrastructure Pipeline (NIP) of Rs. 103 lakh crore.
As an exemption, the budget has provided a new income tax regime that favours taxpayers, which has proved to be a setback for the life-insurance stocks. It fell sharply as SBI Life Insurance dived 6.3 per cent, ICICI Prudential Life Insurance lost 6.6 per cent, HDFC Life Insurance Company shed 3.4 per cent.
The government estimated nominal GDP to be at 10 per cent from the current 5.5 per cent. This brought in opposition’s uproar and shock.
Citing the reason behind the negative reaction of the stock market, KC Purohit Former president of Federation of Karnataka Chambers of Commerce and Industry (FKCCI), said that it might be because there is no direct benefit for many sectors in the budget.
Former president Purohit said, “There is the possibility that the stock market might show positive results later. It has happened many times. Out of the last 10 times during the budget day, the stock market has traded negative six times. I believe stocks will pick up soon.”
