Mixed Market Sentiments Prevail as Nifty 50 Gaps Up After Interim Budget 2024

February 2, 2024 - 9:12 AM

In the wake of the interim budget presented on January 1, 2024, the Indian share market experiences a dichotomy in reactions. As of 9:12 AM on February 2, 2024, the Nifty 50 kicks off the day with a significant gap up, opening at 21,812, surging ahead by 115 points. Similarly, Nifty Bank follows suit, commencing at 46,568, marking a gap up of 379 points. Meanwhile, the Sensex initiates the day at 71,977.

Key Budget Highlights:

1. Finance Minister Nirmala Sitharaman emphasizes "5 Disha Nirdashak Baatein," focusing on social justice, the welfare of the poor, youth, women, and farmers, infrastructure development, technology-driven productivity, and a high-powered committee addressing demographic challenges.

2. India boasts three consecutive years of 7% GDP growth, retaining its position as the fastest-growing economy in the G20.

3. Despite challenging times, the government successfully reduces the fiscal deficit while maintaining focus on development and effective economic management.

4. Continued government capital expenditure (Capex) highlighted as crucial for sustained economic growth.

5. Despite disruptions in the Red Sea, the India, Middle East, European Corridor (IMEC) project remains on the agenda.

6. Withdrawal of 1.1 crore outstanding small direct tax demands, costing less than ₹3,500 crore to the exchequer.

7. Clarification on tax rates: No extension of lower tax rates for new manufacturing units entering operation after March 2024.

8. Disinvestment targets for FY25 not fixed; Finance Minister aims for fiscal consolidation, surpassing earlier expectations.

9. Fiscal prudence affirmed; Finance Minister Sitharaman reassures credit rating agencies about aligning with and exceeding fiscal consolidation paths.

10. Examination of the relevance of the target to reduce the Centre's debt-to-GDP ratio to 40%, considering pre-COVID-19 parameters, says Finance Secretary TV Somanathan.

Investors remain watchful as market dynamics unfold amid budget implications and global economic challenges.