Stock Market Live Updates: Day after Budget, Sensex and Nifty open lower over tax hike on equity investments | Business News
Stock Market Live Updates: Market watchers have hit out against Tuesday’s Budget, saying the move to hike long term capital gains tax from 10 per cent to 12.5 per cent will discourage savings and investments.
Stock Market Live Updates: The Indian benchmarks — NSE Nifty 50 and S&P BSE Sensex — opened marginally lower on Wednesday, a day after the Union Budget, as the government’s decision to raise tax on gains from equity investments has dented investor sentiments.
How did the stock markets react to the Budget? The Indian stock markets declined significantly on Tuesday as the government proposed to raise the tax on capital gains and on trading derivatives. The NSE Nifty 50 and S&P BSE Sensex dropped about 1% each. The Indian rupee also dropped to a record low against the US dollar to 83.69.
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What are market watchers saying? Market watchers said that the move to hike long term capital gains (LTCG) tax from 10 per cent to 12.5 per cent will discourage savings and investments. “Just when the stock market has been having a good run for a long time, the news dampened the spirits… It is an unnecessary move,” Gaurav Bora of Laksh Financial Solutions told The Indian Express. C S Iyer, senior investment planner, reiterated the sentiments, saying: “When people are taking to stock market in a big way why discourage them. One hopes the FM will take note of it and withdraw her move.”
Live Blog
Share Market Budget 2024 Live: As the Stock Markets absorb the effects of the announcements made by Finance Minister Nirmala Sitharaman while presenting the Budget, follow this space for latest updates
‘Retail investors flock to market, hold Rs 36 lakh crore worth stocks’
The number of retail investors in the domestic stock market has surged to over 9.5 crore at present and they directly own close to 10 per cent in the market through investments in 2,500 listed companies, the Economic Survey 2023-24 said.
This unprecedented surge in retail investor participation and activity has been fueled by the technological advancement such as India Stack and regulatory measures.
“Individual investors today are over 9.5 crore and have nearly 10 per cent direct ownership of the market through its almost 2,500 listed companies. This translates to around Rs 36 lakh crore of wealth as of March 2024, apart from indirect ownership in equity mutual funds that have Rs 28 lakh crore in assets under management (AUM),” the survey said. Read More
How does a Union Budget influence the economy?
Apart from not overburdening people with increasing levels of borrowings and debt, a government can use the budget to influence the behaviour of Indian citizens and businesses in two broad ways.
One is by tweaking who it taxes and how much. For instance, if a government wants to incentivise businesses in one segment of the economy — presumably because it believes such a move will leverage India’s demographic profile, create jobs and bring prosperity — it can lower the tax rate. To be sure, lowering the tax rate may not necessarily lead to lower revenues; it is quite possible that the increased economic activity (thanks to the lower tax rate) leads to higher overall revenues despite a lower tax rate.
Second is by tweaking where a government spends and how much. While the budget is only for a year, budgets at the start of a new government’s term (as is the case this time) can often signal a broader shift in how the government wants to spend its money.
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First uploaded on: 23-07-2024 at 07:24 IST
