Market Reaction to Union Budget 2025
The Indian stock market witnessed a volatile trading session following Finance Minister Nirmala Sitharaman's presentation of the Union Budget 2025. Despite key announcements aimed at bolstering consumption and tax relief, benchmark indices closed nearly flat:
S&P BSE Sensex: Gained 5.39 points to close at 77,505.96
NSE Nifty 50: Declined by 26.25 points to settle at 23,482.15
Mixed reactions from investors stemmed from optimism surrounding tax cuts and consumption-related measures, counterbalanced by concerns over lower-than-expected capital expenditure (capex) allocations.
Budget Highlights Impacting Markets
Some of the budget’s key announcements influencing market dynamics include:
Income Tax Relief: Individuals earning up to ₹12 lakh annually under the new tax regime will not be required to pay any income tax. This measure aims to increase disposable income and stimulate consumption.
Capex Allocation: A 10% year-on-year rise in capex spending was announced, primarily targeting infrastructure, railways, and defense sectors.
Defense Spending: Increased by 10%, which market experts view as a positive indicator for defense-related stocks.
Expert Opinions on Budget Impact
Vinod Nair, Head of Research at Geojit Financial Services, commented:
"The market had mixed reactions due to the 10% rise in capex for FY26, which was lower than expected. Sectors like railways, defense, and infrastructure saw limited benefits, leading to cautious sentiment."
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted that the budget leaned more toward consumption than capex spending:
"Markets had anticipated a stronger push toward capital expenditure. However, the government has chosen a balanced approach, which still offers long-term benefits."
He added that the next key trigger for the market would be the Reserve Bank of India's (RBI) monetary policy announcement in February.
Short-Term Market Outlook
Shrikant Chouhan, Head of Equity Research at Kotak Securities, stated that the short-term market sentiment remains bullish despite temporary overbought conditions.
Nifty Support Zones: 23,270 and 23,100 (20-day SMA)
Nifty Resistance Zones: 23,810 and 23,900 (50-day SMA)
Bank Nifty Support and Resistance: Key support at 49,000, with resistance at 50,250 and 50,500
Looking ahead, market participants are expected to focus on Q3 corporate earnings, global cues, and any liquidity measures announced by the RBI.
Stocks to Watch Post-Budget 2025
Experts have identified key stocks that may benefit from market developments and budgetary measures:
Sumeet Bagadia's Recommendations
Bajaj Healthcare Ltd
Current Price: ₹689.15
Target Price: ₹740
Stop Loss: ₹660
Rationale: Positive momentum supported by higher trading volumes, signaling potential continued growth
Shaily Engineering Plastics Ltd
Current Price: ₹1613.4
Target Price: ₹1730
Stop Loss: ₹1560
Rationale: Breakout from a narrow range with a double-bottom pattern formation indicates a promising upward trend
Ganesh Dongre's Picks
ICICI Securities Ltd
Current Price: ₹834
Target Price: ₹860
Stop Loss: ₹820
Rationale: Bullish reversal pattern with strong support at ₹820, signaling a potential retracement
Axis Bank Ltd
Current Price: ₹998
Target Price: ₹1025
Stop Loss: ₹975
Rationale: Reversal price action at ₹998 with strong support at ₹975 suggests a continuation of the rally
DLF Ltd
Current Price: ₹760
Target Price: ₹795
Stop Loss: ₹745
Rationale: Bullish reversal pattern with potential rebound toward ₹795
Conclusion
The Union Budget 2025 has set the stage for cautious optimism in the Indian stock market. While consumption-driven measures and tax relief are expected to provide medium-term support, concerns remain over lower-than-expected capex spending.
The upcoming RBI monetary policy announcement and corporate earnings season will be pivotal in shaping market sentiment. Investors may find opportunities in consumption-related stocks, banking, and financial services as the market navigates these key developments.
Komentarji