Sensex Gives Thumbs Up To Arun Jaitley’s Budget, Surges 486 Points

  • Press Release|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 23 October, 2020

The stock markets gave thumbs up to Finance Minister Arun Jaitley’s fourth Budget and first after notes ban after the Finance Minister announced spending a record Rs. 3.96 lakh crore on building infrastructure. This, along with tax cuts to small businesses who have turnover of up to Rs. 50 crore per annum also boosted the market sentiment. Analysts say that the Dalal Street also welcomed government’s decision to keep fiscal deficit at 3.2 per cent of the gross domestic product (GDP) for financial year 2017-18 and 3 per cent for 2018-19.

Rakesh Bharagava, director at Taxmann, said, “The reduction in corporate tax rates for small companies will give a boost to the startup ecosystem. It will encourage unorganized partnership firms to incorporate a Company. The benefits shall be available to SME Companies who are generating turnover of up to Rs. 50 crores. Approximately 96 per cent of companies will get this benefit of lower taxation.”

After the finance minister’s Budget speech, the Indian benchmark indices rose to their highest level in three month. The Sensex surged as much as 504 points and Nifty hit a high of 8,723. 

But the BSE benchmark Snesex closed 486 points higher at 28,142 and Nifty closed at 8,716, up 155 points.

A K Prabhakar, head of research at IDBI Capital Markets & Securities, said: “The government presented a good Budget with no negative surprises which is positive for markets. There was no tinkering of long term capital gains and short term capital gains and that is the reason for surge in the stock markets.”

Banking shares came in huge demand after Finance Minister Arun Jaitley said, that the government will infuse another Rs. 10,000 crore in public sector banks in its efforts of re-capitalising state-run lenders.

Energy, auto, infrastructure and real estate shares were also witnessing good buying interest.

On the other hand, IT shares were witnessing selling pressure for second day in a row after a legislation was introduced in the US House of Representatives which calls for doubling the minimum salary of H-1B visa holders to $130,000.

From the Nifty basket of shares, 37 shares ended higher while 14 were among the laggards.

Mahindra & Mahindra, Maruti Suzuki, Bank of Baroda, ITC, ICICI Bank, State Bank of India, Eicher Motors, HDFC, HDFC Bank, Larsen & Toubro, Axis Bank, Reliance Industries and Hero MotoCorp were among the gainers in the Nifty.

On the other hand, TCS, Wipro, Sun Pharma and Tech Mahindra were among the losers.

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