Sensex ends below 36000, Nifty marginally lower as LTCG tax proposed

From impact of budget 2018 on the market to stock movements, all that happened in the market today

3:54 PM

Views on LTCG by Aashish Somaiyaa, MD & CEO, Motilal Oswal AMC

 

Equity markets were keeping fingers crossed for imposition of Long Term Capital Gains tax, which has finally come. Having STT and LTCG both is unfair when former was levied expressly in lieu of latter. Happy with the 10% LTCG tax on MFs & the 10% tax on dividends this move will reduce churn and mis-selling. 

 

LTCG implementation is at least well thought out; no disruptive impact. Therefore, over a period of time this tax incidence will be taken in stride and normal life will continue as far as investments in equities is concerned. 10% is modest and grandfathering earlier gains is a positive. It is not a big negative and markets should eventually digest it

3:46 PM

Market rundown by Jayant Manglik, President, Religare Broking

 

The much-awaited Union Budget turned out to be a balancing act, pleasing some and disappointing others. The announcement of long term capital gains on equity investments combined with possible slippage in meeting fiscal deficit target dampened the sentiment. Personal income tax too should have been addressed, or at least the slabs indexed to inflation. The focus on Bharat as well as farmers was expected and necessary.

 

We might see an overhang of this event for next couple of sessions and then focus will return to earnings. Signals are in the favor of consolidation in the index while profit taking may continue on the broader front. We reiterate our bullish yet cautious stance and suggest preferring index majors for trading

3:39 PM

Top Sectoral loser: Nifty pharma

3:37 PM

Sectoral Trend

3:36 PM

Sensex top gainers and losers

3:34 PM

Market at close

Benchmark indices ended marginally lower after the government imposed a long-term capital gains tax. Budget 2018 has proposed to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares.

 

The S&P BSE Sensex ended at 35,906, up 58 points while the broader Nifty50 index settled at 11,016, up 10 points.

3:20 PM

With LTCG, free ride for markets is over, says Andrew Holland

 

The main focus of Finance Minister Arun Jaitley, while presenting the Budget 2018, has been on the rural sector and infrastructure development. This was expected from the government in its last full Budget ahead of the general elections scheduled in 2019. 

 

The assumptions on tax revenues going ahead are reasonable and not aggressive given that the taxpayer base will increase. That said, the fiscal deficit at 3.3% of the GDP (gross domestic product) for 2018–19 is still a challenge. The economy needs to be firing on all cylinders to achieve the set fiscal deficit target. The bond yields are now nearing 7.5%. This clearly indicates that there will be challenges in meeting the fiscal deficit target. READ MORE

3:12 PM

Railway, infrastructure related stocks trade mixed post Budget

 

Shares of railway and infrastructure related companies were trading mixed after Finance Minister Arun Jaitley presented the Budget for the financial year 2018-19 in Parliament on Thursday.

 

Titagarh Wagons, Kernex Microsystems (India) and Stone India were down 5% each on BSE. GMR Infrastructure, IL&FS Engineering and Construction Company, GVK Power & Infrastructure, Larsen & Toubro (L&T), Siemens, Hind Rectifiers and Zicom Electronic Security Systems were trading higher by up to 9%. READ MORE

2:58 PM

LTCG in Budget 2018: Investing in mutual funds? Look at growth schemes

 

A 10% long-term capital gains (LTCG) tax has not upset the mutual funds industry. Sector officials say that the move will not have any major impact on current inflows in equity and that it will settle down fast. According to them, growth schemes will be more looked for going forward against dividend-paying schemes.  

 

According to the Finance Bill 2018, "With a view to providing a level playing field between growth-oriented funds and dividend paying funds, in the wake of new capital gains tax regime for unit holders of equity oriented funds, it is proposed to amend the said section to provide that where any income is distributed by a Mutual Fund being, an equity oriented fund, the mutual fund shall be liable to pay additional income tax at the rate of 10% on income so distributed." READ MORE

2:52 PM

First impression on Budget 2018 from  Devam Modi, Director of Equirus Securities

 

There has been a clear attempt to help the farmer, common man and SMEs with various populist schemes. Crucial rural impetus along with continued allocation to infra and a heavy focus on health care. We would have liked to see measures related to IBC or resolution of corporate credit stress. The fiscal deficit miss was broadly expected but is being considered a tad higher. 

 

Going ahead, the market is more exposed to a commodity spurt and resultant inflation given the populist focus related to agriculture. We do not see chances of rate cuts or yield moderation and remain positive on pockets related to domestic rural, infra and health sectors. Given the combination of elevated valuations and high growth potential, we think there will be a skewed reward for companies who are able to deliver steady growth.

2:42 PM

India bonds slump as government raises deficit target

 

India’s benchmark 10-year bonds slumped on Thursday after the government set a higher-than-expected fiscal deficit target for the year starting in April.

 

The yield for the benchmark 10-year bond rose 9 basis points to 7.50% after the deficit forecast. It had closed at 7.43% on Wednesday.

2:41 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,004.40	+39.38	+0.11
S&P BSE SENSEX 50	11,518.36	+11.48	+0.10
S&P BSE SENSEX Next 50	35,690.14	-123.48	-0.34
S&P BSE 100	11,422.44	+3.37	+0.03
S&P BSE Bharat 22 Index	3,860.49	+16.26	+0.42

2:39 PM

Quote on Budget

 

Hemang Jani, Head Equity Sales & Advisory, Sharekhan

 

No major disappointment in the budget proposals. On overall basis Long term capital gains tax doesn’t look dampening and revenue growth assumptions are looking realistic. Investors should focus on sectors/stocks having agri or rural theme. Escorts, Ashok Leyland, M&M, PI Inds and UPL will be positive. 

 

Other picks: Apollo Tyre: Raise in custom duty on truck bus radial tyres from 10 to 15 percent to benefit the company 

 

ITC: No increase in tax rates on Cigarettes – Qtrly nos have been in-line. 

2:28 PM

Insurance shares soar as FM proposes National cover plan

 

Shares of companies engaged in insurance business such as SBI Life Insurance, ICICI Prudential Life Insurance Company (ICICI Pru) and HDFC  Standard Life Insurance Company have rallied by up to 9% on BSE in intra-day trade after the government proposed a national health protection scheme to benefit 100 million poor families in the Union Budget 2018-19.

 

To provide Rs 500,000 per family annually for medical reimbursement under National Health Protection Scheme, the finance minister says the plan will protect 500 million poor people and will be world's largest health protection scheme. READ MORE

2:22 PM

India bonds slump as government raises deficit target

 

India’s benchmark 10-year bonds slumped on Thursday after the government set a higher-than-expected fiscal deficit target for the year starting in April.

 

The yield for the benchmark 10-year bond rose 9 basis points to 7.50 percent after the deficit forecast. It had closed at 7.43 percent on Wednesday.

2:18 PM

Quote on Budget

B Gopkumar, Executive Director & CEO , Reliance Securities: A Prudent Balance between Fiscal Discipline and Economic Growth

 

There are all efforts in Union Budget 2018 to appease rural and EWS population but at the same time Government tried to maintain the fiscal discipline by keeping fiscal deficit target at 3.5% and 3.2% for FY18E and FY19E, respectively. Although deficit targets are higher as compared to previous estimates but considering surge in prices of crude oil these are respectable numbers

 

Govt has also decided to impose 10% tax on Long Term Capital Gains (LTCG) for equity and equity oriented investments for amount exceeding capital gains of Rs1 lakh. The tax will be applicable based on cost prices prevailing on 31st January 2018, which will prevent any large scale selling in stock markets.

2:13 PM

Quote on Budget

 

G Pradeepkumar, Chief Executive Officer, Union Asset Management Company

 

The decision to levy LTCG on equity at the rate of 10% is not surprising and is unlikely to have any significant adverse impact on the markets. This still keeps equities as the most attractive asset class from a taxation perspective since the holding period to be eligible for LTCG on most other asset classes is three years. The fact that that gains made up to 31st January 2018 will be grandfathered indicates that the government has thought through the proposal quite clearly.

2:07 PM

What 10% LTCG tax on gains over Rs 100k means for investors

 

Budget 2018 has proposed to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares. However, capital gains made on shares until January 31, 2018, would be grandfathered, the finance minister said. Also, there has been no change in the definition of short-term capital gains tax (STCG).

 

“The much-anticipated introduction of LTCG is now back with a new avatar. As we know in tax legislation, this could only get worse over a period of time with every successive Budget diluting the original commitment of taxing long-term gains,” said Milind Kothari, managing partner at BDO India. READ MORE

1:57 PM

Sectoral Trend

1:55 PM

Budget 2018: IT stocks mixed after FM's digital push in education sector

 

Finance Minister Arun Jaitley presented the Union Budget of 2018 on Thursday. 

 

IT stocks traded mixed on BSE after the finance minister Arun Jaitley in his Budget speech said that technology will be the biggest driver in improving the quality of education.

 

TCS (up 1.27%), HCL Technologies (up 0.6%), Persistent Systems (up 0.06%) and Tech Mahindra (up 0.03%) edged higher. Infosys (down 1.42%), Wipro (down 0.13%) and Oracle Financial Services Software (down 0.06%) edged lower. READ MORE

1:53 PM

PM Modi on Budget 2018: From food processing to fibre optics, roads to shipping, youth to senior citizen, rural India to Ayushmaan Bharat, Digital India to Start Up India, this budget strengthens hopes and aspirations of crores of Indians

1:51 PM

PM Modi on Budget 2018: This budget has devoted attention to all sectors, ranging from agriculture to infrastructure

1:50 PM

PM Modi on Budget 2018: This budget has devoted attention to all sectors, ranging from agriculture to infrastructure

1:50 PM

PM Modi on Budget 2018: I congratulate Finance Minister Arun Jaitley for the decision regarding MSP. I am sure it will help farmers tremendously

1:46 PM

SpiceJet surges as government proposes Udan expansion

 

SpiceJet has surged 15% to Rs 142 on BSE in intra-day trade after Finance  Minister Arun Jaitley said the low-cost air connectivity scheme, UDAN (Ude Desh ka Aam Nagrik), will connect 56 unserved airports and 31 unserved helipads.

 

“In the last three years, the domestic air passenger traffic grew at 18% per annum and our airline companies placed orders for more than 900 aircrafts. Regional connectivity scheme of UDAN initiated by the Government last year shall connect 56 unserved airports and 31 unserved helipads across the country. Operations have already started at 16 such airports,” Jaitely said today, as he announced a Budget 2018-19. READ MORE

1:37 PM

PM on Budget 2018

Budget is development friendly & had addressed concerns of the poor & middle-class

1:27 PM

1:18 PM

Finance Scretary to ET NOW

 

• LTCG will be addition to STT
• Total income from STT is only Rs 9000 cr
• LTCG tax is too small for anyone to be disappointed
• No decision taken by govt on Budget year

1:17 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,056.46	+91.44	+0.25
S&P BSE SENSEX 50	11,530.29	+23.41	+0.20
S&P BSE SENSEX Next 50	35,700.30	-113.32	-0.32
S&P BSE 100	11,433.05	+13.98	+0.12
S&P BSE Bharat 22 Index	3,870.13	+25.90	+0.67

1:16 PM

Rajiv Kumar to ET Now

 

Commend FM for not taking path of fiscal fundamentalism

 

Need to see transformation of the Indian economy in areas like agri, health