Markets Look Miffed Post Maiden Budget

New provisions in the Budget continue to wreck havoc for the equities market.

- Yagnesh Kansara

Though proposals related to the capital markets took up a chunk of airtime in Nirmala Sitharaman’s maiden budget speech, the stock markets were not particularly thrilled at the Union Budget for 2019-20.

Market participants were expecting some dose of revival for the economy, which lost the steam of growth and wished that the Finance Minister would present the budget, which will not only kickstart the slowing economy but will also give some direction to lost financial markets.

Instead, Sitharaman’s maiden budget not only lacked adequate incentives, but certain proposals absolutely failed to strike a chord. Schemes such as Super Rich Tax, hike in public shareholding limits for listed companies and ambitious disinvestment target set for the Financial Year 2019-2020 (FY20) proved to be detrimental for the market and has caused irreparable damage to market sentiments.

This story was penned on Friday, July 19, when the benchmark indices closed with second most heavy losses in the calendar year till date. The Bombay Stock Exchange (BSE)’s S&P Sensex dropped by 560 points while the National Stock Exchange (NSE)’s Nifty50 shed 178 points to close respectively at 38,337 and 11,419 points.

Commenting on 2019’s second largest fall in the benchmark indices, Arun Thukral, MD and CEO, Axis Securities said, “The correction was in response to a combination of the surcharge on the Foreign Portfolio Investors (FPI), tepid results by a couple of companies and rising slowdown concerns. The markets are expected to be volatile in the near term on account of eclectic events such as US Fed policy meeting scheduled on July 30 or 31, the progress of monsoon and results of various companies.