- Sensex falls by 280 points, closing at 80,149; Nifty down by 66 points to 24,414.
- Axis Bank and Tata Consumer decline by 2% each.
- BSE MidCap and SmallCap indices rise; FMCG stocks are seen as attractive investments.
On Wednesday, Indian stock markets faced another volatile session as investors reacted to the Budget 2024 proposals. The BSE Sensex dropped by 280 points to end at 80,149, while the Nifty50 closed at 24,414, down 66 points. Major stocks like Axis Bank and Tata Consumer fell by 2%, contributing to the broader market decline.
Despite the downturn in major indices, the BSE MidCap and SmallCap indices showed gains, rising by 0.68% and 2% respectively. Sector-wise, the Nifty Media index saw a notable increase of 2.5%, whereas the Nifty Bank index fell by 0.89%, reflecting varied sector performances.
Budget 2024’s Impact on Indian Markets and Investment Strategies
The recent Budget 2024 has introduced a significant change with increased short-term capital gains (STCG) tax and a marginal rise in long-term capital gains (LTCG) tax on equities. This shift has prompted a mixed reaction in the stock market, with major indices experiencing declines. However, the broader market indices such as BSE MidCap and SmallCap have performed better, indicating that specific segments are responding more favorably to the new fiscal policies.
Dr. V K Vijayakumar of Geojit Financial Services suggests that investors should focus on FMCG stocks, which appear attractive from a valuation perspective amidst the changes. The Budget’s emphasis on fiscal consolidation and India’s growth trajectory is seen as a positive development, despite concerns over increased capital gains tax.
The Indian stock market has faced pressure following Budget 2024’s tax changes, yet opportunities remain in sectors like FMCG. Investors are advised to adapt their strategies to align with the new fiscal environment.
“Now that the steep increase in STCGs tax and the marginal increase in LTCGs tax on equity is a reality, investors should focus on investing in stocks which can deliver superior returns.” — Dr. V K Vijayakumar
