Finance Minister Nirmala Sitharaman will deliver her budget like "never before" that is expected to provide relief to the pandemic-hit economy and is likely to focus on driving the recovery through higher spending on healthcare, infrastructure and defence.
On Friday, the Sensex had crashed 588.59 points (1.26 per cent) to finish at 46,285.77 -- taking the six-session aggregate loss to 3,506.35 points (7.04 per cent). Likewise, the Nifty furthered its loss by 182.95 points (1.32 per cent) to settle at 13,634.60. Over the last six days, the NSE benchmark has shed 1,010.10 points (6.89 per cent).
"Indian benchmark equity indices broke the six-day losing streak as markets cheered the Union Budget 2021 presented by the FM in Loksabha on Feb 01 even as she spelled out the Modi government's plan for economic recovery. At close, the Nifty was up 646.60 points or 4.74% at 14281.20. The Sensex registered the best Budget day gains since 1997.
Volumes on the NSE were expectedly high on the Budget day. Except pharma, other sectoral indices ended with a gain of 1-8 percent. Broad market indices - BSE Midcap and Smallcap rose 2-3 percent. Markets felt that the Banks, Infrastructure, Materials and Metals sector could be benefitted by the privatization and spending thrust in the Union Budget.
Asian stock markets gained Monday after coronavirus vaccine maker AstraZeneca agreed to increase supplies to Europe amid rising worries about the disease. European stocks advanced on Monday, echoing positive market sentiment elsewhere.
India’s manufacturing industry started the year 2021 on a strong note with Manufacturing Purchasing Managers Index (PMI) for the month of January at 57.7, reflecting the strongest improvement in three months. Manufacturing PMI in December 2020 and November 2020 came in at 56.4 and 56.3, respectively.
Nifty has reversed the latest downtrend swiftly due to the Budget provisions. Reaction of the FPIs to the Budget provisions will be keenly watched and if they don't seem to mind the large absolute fiscal deficit numbers, large Govt borrowing numbers and delay in achieving the 3% fiscal deficit targets, this upward momentum can continue. 14378-14471 could be the next band of resistance for the Nifty and in case this is breached a move towards the earlier high of 14754 can be seen."
"The Union Budget 2021 is a boon for the equity market with all the essential aspects of growth supported by an increase in government spending without an increase in indirect taxes. Proposal for the privatisation of 2 PSU banks and measures to curb the impact of NPAs helped the banking index to lead the soaring rally. Higher government spending in Infrastructure and increased FDI limit in Insurance improved the overall outlook of these sectors. Although Cess can have a marginal impact on the related sectors, the budget provides incentives to generate wealth in the economy without providing a high burden on households and private sectors"
IndusInd Bank, ICICI Bank, Bajaj Finserv, State Bank of India (SBI), Larsen & Toubro (L&T) and Housing Development Finance Corporation (HDFC) were the biggest gainers on the Budget day.
Just three stocks ended in the red.
The S&P BSE Sensex settled at 48,600.61, rallying by 2,314.84 points (5.0 per cent), while the Nifty 50 surged 646.60 points (4.74 per cent) to end at 14,281.20.
Finance Minister Nirmala Sitharaman has presented the Union Budget 2021-22 in Parliament. In significant changes to the taxation process, Sitharaman announced the scrapping of income tax for senior citizens under certain conditions, new rules for removal of double taxation for NRIs, and a reduction in the time period of tax assessments among other measures. Click here to read her entire speech
Finance Minister Nirmala Sitharaman allotted Rs 35,000 crore for coronavirus vaccines in the country as part of the newly launched Aaatmanirbhar Swasth Bharat Yojana.
"A new centrally sponsored scheme PM Atmanirbhar Swasth Bharat Yojana will be launched with an outlay of about 64,180 crores over 6 years," Finance Minister Sitharaman said during her speech while presenting the Union Budget 2021-22 in the Parliament on Monday. Click here to read
"This year's Union budget presented by Finance Minister Nirmala Sitharaman was a step towards building a $5 trillion economy. The primary focus of this year’s budget speech was the healthcare sector for which the government has allocated an outlay of Rs 64,180 crores over six years. This was much needed considering the once-in-a-century global pandemic that the nation is currently braving. The FM has even proposed an increase in the foreign direct investment limit in insurance from 49% to 74% – a long-standing ask of the Indian insurance industry. There has always been a strong relationship between foreign investment and economic growth and to achieve the current economic target, a larger inflow of investment is much needed. Expanding FDI is a revolutionary move as it will not only help in capital infusion but will also be beneficial in increasing the insurance penetration rate in India. It will also provide room for more players in the market, thus increasing competition and choice of products to choose from. For customers, higher spend on the healthcare industry means more investment in tech-based customer services and innovative insurance products for overall protection."
"The Budget rightly decided to focus on economic growth by raising expenditure and allowing for a wider fiscal deficit in these pandemic times. Importantly, spending on capital expenditure is far higher at 2.5% of GDP vis-à-vis 1.7% last year, a move in the right direction. Domestic manufacturing is going to be a big growth engine with previous corporate tax reductions, correction of inverted duty structures and a lot more subsidy to come on the PLI front.
Besides the widely expected allocation increases to housing, infrastructure, health and textiles, the move to curb prolonged tax scrutiny and firm mindset shown to privatise certain PSUs, creation of ARCs for bad loans and monetise government land banks are steps in the right direction.
What appealed most to the stock market was the absence of moves like wealth tax or an increase in LTCG on equity investments. Unless there are any devils in the fine print, the Budget has been kept simple and played the right cards.
However, bond yields are bound to harden given the extended borrowing programme of the government and inflationary expansion in the budget."
Here's how the key BSE indices were performing at 2:01 pm:
"Budget called for increased government spending to revive the economy. There was an infrastructure push in the budget, focussing on development finance institution and asset monetization to fund the infra projects. Privatization of PSBs was another bold announcement. Positively, there wasn’t any increase in taxes, even when the fiscal deficit figures are projected at a higher range."
Finance Minister Nirmala Sitharaman proposed many new measures in Budget 2021 to prop up the flagging economy amid the Covid-19 pandemic and boost spending across sectors. Here is what the top proposals entail. Click here to read
"Hats off to the FM for sticking to her promise of a budget that will be remembered for 100 years. A budget with no changes in Direct taxes will certainly be remembered for years to come. Equity market will be enthused with no tinkering in capital gains taxes or STT or any form of Covid tax. The proposals to privatize 2 PSBs and 1 general insurance co is noteworthy as is the increase in FDI limit in Insurance to 74%. The much-awaited proposal to set up a DFI should boost CAPEX in the coming years. To summarise the revival in the economy seen in the last 4-5 months will be further enhanced with the various budget proposals. Tax buoyancy, successful divestments and quick monetization of operating infrastructure assets remain a key to achieving the fiscal deficit target of 6.8 % for Fy 21-22."
"As expected, healthcare got the highest priority in resource allocation and policy support including Rs 64,180 crore outlay under PM Aatmanirbhar Swastha Bharat scheme. It bodes well for healthcare facilities and wellness-oriented real estate.
Further, FY 2021-22 capital expenditure outlay at Rs 5.54 lakh crore to ensure that the target of becoming a USD 5 trillion economy by 2025 is well on track. This will positively impact infrastructure, connectivity of Tier II cities, and job creation for SMEs and MSMEs – thereby benefitting the target customers of affordable housing.
For the ‘Aam Aadmi,’ personal tax relief by way of tax rate cuts or favourably readjusted tax slabs topped demand and the FM failed to deliver on it. An upward revision in the deduction limit under Section 80C (at INR 1.5 lakh a year) was long overdue and increasing this limit would have increased disposable incomes, inevitably pushing up consumption. It would have also helped improve consumer sentiments across sectors – the real need of the hour.
As anticipated, affordable housing and rental housing got a big boost with the govt. extending the period for extra deduction of Rs 1.5 lakh available for loans up to 31st March 2022. This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment. As per ANAROCK Research, affordable housing already accounts for more than 35% of the supply across the top 7 cities in the country.
Infrastructure got a major push. Infra works proposed include building 8,500-km of highways by March 2022. There were big infra sops announced for poll-bound states including West Bengal, Tamil Nadu, Kerala and Assam. The govt. also announced the Bill to set up Development Finance Institution (DFI) providing Rs 20,000 crore to boost infrastructure projects. The Modi government has not lost sight of its USP of infra creation, which will help connect more areas and thus open them up for real estate development.
Customs duty on steel reduced to 7.5% will create some space to real estate developers who may not be in a position to increase prices immediately.
The announcement to set up 7 mega textile parks with plug-and-play facility in 3 years will unlock the potential of new markets for development and provide an impetus to real estate assets, including logistics and warehousing.
Post the pandemic, the chances of NPAs growing are significantly high. The Budget announced the setting up of ARCs to help banks to cushion the impact of the pandemic. Besides the setting up the long-awaited bad bank, the government will also infuse INR 20,000 crore into public sector banks as part of its recapitalisation plan.
All in all, the budget was broad-based with special emphasis on building robust healthcare infrastructure, physical infrastructure and affordable housing. It will result in job creation in the informal sector, which was severely impacted by the pandemic. Creating buoyancy in the job market will benefit the Indian economy in the long run. The focus on rural job creation will also give a boost to affordable housing, which will help increase housing demand in tier 2 & 3 cities."
"This is indeed a bold growth-oriented budget. Absence of the much-feared Covid tax and the surcharges on Income Tax is a great relief. Privatization of 2 nationalised banks and proposal of monetization of assets like land are clear positives. Raising FDI in insurance from 49% to 74% is welcome. Market response to the budget reflects growth optimism. In brief, the FM has presented a pragmatic, bold and visionary budget in these difficult times"
Sensex extends its gains as Finance Minister Nirmala Sitharaman concluded her Union Budget 2021 speech.
The securities mkt code will include Sebi Act, Govt Securities Act and Depositories Act
BSE Oil & Gas reacts:
FM Sitharaman in her budget speech said that the fiscal deficit for FY21 is pegged at 9.5 per cent of GDP while FY22 fiscal deficit is pegged at 6.8 per cent.
Finance Minister Nirmala Sitharaman said that the divestment target for FY22 would be at Rs 1.75 lakh crore.
FM Nirmala Sitharaman announced further infusion of Rs 20,000 crore for the public sector banks
Nifty PSU Bank index reaction:
Here's how the key BSE indices were performing at noon:
Finance Minister Nirmala Sitharaman said that the government will increase the FDI limit in insurance sector to 74 per cent from 49 per cent.
Finance Minister Nirmala Sitharaman said that the Govt will bring the IPO of LIC of India in FY22.
Finance Minister Sitharaman said that her Govt will provide Rs 5000 crore to NHAI InVIT for highways
Sensex extends its gains as Finance Minister Nirmala Sitharaman announces new schemes in her ongoing Union Budget 2021 speech.
S&P BSE Healthcare index erases most of its losses as FM Sitharaman announces new healthcare scheme
Finance Minister Nirmala Sitharaman announced vehicle scrapping policy in Budget 2021.
Nifty Auto index reaction:
FM Sitharaman introduces Aatmanirbhar Health Yojana with an outlay of Rs 64,180 crore over 6 years
Ahead of announcing the allocations and what the government plans to do for the upcoming financial year, Sitharaman is highlighting what the government has done for the poor, the migrants, children as well as senior citizens under various schemes. "Announcments made earlier were like 5 mini budgets themselves," she said.
Finance Minister Nirmala Sitharaman: Preparation of budget was undertaken in circumstances like never before.
Finance Minister Nirmala Sitharaman begins the speech of Budget 2021.
Sensex is trading over 500 points higher ahead of the presentation of the Union Budget 2021 in Parliament.
Rupee rises 7 paise to 72.89 against US dollar in early trade. (PTI)
At 10:31 am, the S&P BSE MidCap index on the BSE was trading at 18,040.11, down 42.12 points (-0.23 per cent), while the S&P BSE SmallCap index was at 18,004.53, up 16.33 points (0.09 per cent).
Finance Minister Nirmala Sitharaman called on President Ram Nath Kovind before presenting the Union Budget 2021-22.
As per established tradition, the Finance Minister met the President at the Rashtrapati Bhawan before heading to Parliament.
At the start of the joint session of Parliament on Friday, PM Narendra Modi said Finance Minister Nirmala Sitharaman had already announced 3-4 mini budgets and that the 2021-22 Budget should be seen as an extension of the same effort. As the country recovers from Covid and one of its worst years as an economy, The Indian Express unscrambles the A to Z of what to expect today. Click here to read
Finance Minister Nirmala Sitharaman and MoS Finance & Corporate Affairs Anurag Thakur arrive at the Parliament.
At 10 am, the Bank Nifty and Nifty Financial Services indices on the National Stock Exchange (NSE) were trading over 1 per cent higher. However, the Nifty Pharma index was down over 1 per cent.
Here's how the sectoral indices were performing:
Finance Minister Nirmala Sitharaman will present and read out the Union Budget 2021-22 through a tab instead of the traditional 'bahi khata'.
(ANI)
"Markets are likely to turn highly volatile today responding to positive and negative Budget proposals. Besides the budget, an area of concern is the huge FPI outflows which touched a high of Rs 5930 last Friday. There is a huge outflow from other emerging markets too. Part of this is due to the issues in US market relating to the hit to hedge funds from the 'GameStock short squeeze'. On the positive side, there are steadily improving news relating to the economy and corporate revenue & profits. IMF projects India's growth rate for 2021 & 2022 at 11.5% and 6.8% respectively making India the fastest-growing large economy in the world the two year period"
The key sectoral index, Nifty Bank was trading around 1.5 per cent higher in the early trade led by gains in the shares of IndusInd Bank and ICICI Bank.
Here's how other bank stocks in the Bank Nifty were performing:
IndusInd Bank, ICICI Bank, Titan, Bajaj Finance, HDFC, Bajaj Finserv were top gainers in the early trade, while Dr Reddy's, Tech Mahindra, Axis Bank and TCS were among the top losers.
At 9:15 am, the S&P BSE Sensex was at 46,660.24, up 374.47 points (0.81 per cent), while the broader Nifty 50 was up 106.95 points (0.78 per cent) at 13,741.55.
Finance Minister Nirmala Sitharaman has arrived at the Finance Ministry, ahead of the presentation of Union Budget 2021 later today.
The S&P BSE Sensex was up over 200 points in the pre-open session ahead of the Union Budget 2021.
Here's how other indices were performing:
Stock markets, which witnessed a roller coaster ride in the last two weeks, are bracing for more volatility on Monday and in the coming days with expectations and worries running high ahead of the keenly awaited Union Budget. Click here to read
After an estimated 7.7 per cent contraction in 2020-21, the Finance Ministry’s Economic Survey projects that India’s real GDP would record a growth of 11 per cent in 2021-22. The nominal GDP growth has been estimated at 15.4 per cent, implying an assumption of 4.4 per cent inflation during the year. Click here to read
Welcome to our special market blog on the day of Union Budget 2021. Catch all the live stock market updates here.