Post the budget rally, Nifty opens flat to negative, on Thursday
By Souvick Bhaduri |
2/2/2017 10:29 AM Thursday
Indian capital markets opened flat to negative on Thursday morning, post a phenomenal rally that was triggered by a 'historic' merged budget announced by FM, Arun Jaitley on Wednesday, popularly termed as the post-budget rally.
This flat to almost negative start has been in the midst of mixed cues from the global markets, where on one hand US and European markets closed in green, and on the other hand Asian indices are trading flat to negative on this Thursday morning.
BSE Sensex has oscillated around 0.30 per cent pre session, and currently is trading at 28166.65, up about 0.10 per cent.
Bourses have rejoiced the move by the GoI whereby the major taxes were left untouched, as against the expectations of the introduction of a Long term capital gains (LTCG) tax or extending of the defining LTCG term to two years from one year.
There was also a big relieving announcement for the foreign investors as Foreign Investment Promotion Board (FIPB) was abolished along with the'Retrospective tax'.
There was a big relaxation on the excise duty front as well for the tobacco manufacturing companies, as the duty was increased by 6 per cent instead of the expected 10 per cent.
The government's focus was concentrated on housing and agriculture in this budget as well. Railways Budget was increased to Rs 1.3 lakh core with safety and expansion of the industry remaining the core focus of the budget. Banks also cheered as the FinMin announced Rs 10,000 crore infusion.
Defense expenditure also saw an increased to Rs 2.74 lakh crore which is a welcome move.
Individuals too got benefited from the decreased tax rate for people with earning bracket of 2.5 - 5 lakhs.
Overall, the budget almost covered all major expected segments, without any major adverse changes, maintaining a graceful balance between abject reality and larger than life expectations, a factor which fuelled the markets to rally almost 2 per cent on Wednesday. However, the underperforming sectors, IT and Pharma will remain in focus as the fear of Trump's new policies will continue to dampen sentiments in a scenario where these industries are in a panic mode.
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