On special trading session for Union Budget, the Indian market showed a good amount of volatility during the budget announcement. However, the after the announcement, the market surged and traded strong at higher levels once the fine prints of budget started coming out. The BSE Sensex closed half a per cent up on the bourses with the banking index showing more than 3 per cent strong rally.

However, there are few stocks were down due to negatives in budget for those companies. The tobacco major, ITC were down by more than 8 per cent on budget day due to the Budget proposal to increase excise duty on cigarettes. Also the HDFC was down by almost 1 per cent despite of strong rally in banking stocks due to changes in definition of fund flows from Foreign Institutional Investors and Foreign Direct Investments. The markets too worried on the Budget proposal to increase service tax to 14 per cent from 12.36 per cent. This will impact the overall consumption and many of categories. Hence the FMCG index on BSE was down by more than 4 per cent after Budget announcement.

All in all the Budget was good for the Indian economy as per the market reaction after announcement. The market participants are enthusiastic about the government’s aim to boost investments by spending without causing a dent on its finances. The finance minister has done adopted pragmatic approach of the government to balance growth and fiscal deficit according to market experts. Now, the Budget was considerably as per the market participants. Now the policy rate cut by the reserve bank and other key reforms will drive the market further.

On Saturday, all global markets were closed. Today morning, the Asian markets were trading strong in green. The Chinese markets were trading higher in green on the news of policy rate cut by its reserve bank due to increasing downward pressure on the Chinese economy. The Hang Seng was up by 0.45 per cent in the morning. Further, the Japanese stocks too surged on weaker yen with the Nikkei 225 gaining 0.23 per cent on bourses. The Australian stocks too surged on the news of expected rate cut ahead of a Reserve Bank of Australia policy decision. The ASX 200 was trading up by 0.89 per cent in the morning.

The pre market barometer of Indian economy, SGX Nifty was trading strong with 104.50 points gain at 8998.50. We too expect domestic markets to open strong in the moring and trade in the green.