Post-Budget Profit Booking Continues In The Market; Sensex, Nifty Close In Red

New Delhi: Indian markets closed on a decline on Thursday, a day after the government proposed an increase in capital gains tax and a hike in the Securities Transaction Tax for F&O transactions in the Union Budget.

The Nifty 50 index closed with a decline of 65 points at 24,413.50, while the BSE Sensex declined by 280 points to 80,148.88 points. However, in the broad market on the National Stock Exchange, all indices closed with gains except the Nifty 50 and Nifty 100. The contrasting performance between the benchmark indices and broader markets highlights divergent investor sentiment amid budgetary and earnings scenario.

 In the sectoral indices, Nifty Bank, Nifty Financials, Nifty Auto, and Nifty FMCG sustained losses. However, the Nifty Realty sector gained today by 0.78 percent after declining more than 2 percent on budget day when the government removed the indexation benefit.

Notable gainers in the Nifty 50 included HDFC Life Insurance, BPCL, Tech Mahindra, NTPC, and SBI Life Insurance. Conversely, Bajaj Finserv, Britannia, Hero MotoCorp, Tata Consumer Products, and HUL were among the major losers.

While large-cap stocks faced selling pressure, mid-cap and small-cap segments benefited from optimistic market outlooks. The reduction in gold customs duty highlights government efforts to stimulate consumer spending and curb inflation, impacting gold prices significantly.

"The Budget, at a margin, has been a bit disappointing from the capital markets perspective (increase in capital gains tax rate and hike in STT for F&O transactions). The stock market will now shift its focus on Q1FY25 earnings and global cues.

The earnings season so far has been in line, with some green shoots visible in the IT and consumption sector, although some sectors such as Financials are seeing some strain," said Rupen Rajguru, Head Equity Investments and Strategy, Julius Baer India. Market experts also highlighted that after a muted start on Wednesday, the markets consistently faced selling pressure. However, the medium-term market texture is still positive.