Budget 2024 Tax Updates: Market expert Anil Singhvi analyzes the post-budget scenario, offering insights on long-term investment strategies and sector performance.
also read: Bharat Electronics Achieves 30% Growth In Q4, Surpassing Estimates
Following the announcement of the national budget, the stock market has shown signs of weakness. The market has been trading within a range today, and although it stabilized after a significant drop yesterday, the negative reaction to the budget news is evident.
Market expert Anil Singhvi has analyzed the scenario for long-term investors, highlighting where to invest in the current market conditions.
Positives from the Budget: Budget 2024 Tax Updates
- Fiscal Deficit Below 5%: The government’s effort to keep the fiscal deficit under control is a positive sign for economic stability.
- Focus on Youth Employment: Increased employment opportunities for the youth can drive economic growth.
- Relief for Small Taxpayers: Tax relief for small taxpayers is expected to boost consumption.
Negatives from the Budget: Budget 2024 Tax Updates
- Increase in Capital Gains Tax and STT: Higher taxes on capital gains and Securities Transaction Tax (STT) could discourage investments.
- Better Tax Benefits on Gold and Property: Attractive tax benefits for gold and property might divert investments from the stock market.
- Increased Attractiveness of Gold Purchases: Gold has become more appealing as an investment.
- Lack of Long-Term Vision: The budget did not provide a detailed roadmap for the next five years or a clear vision for a developed India.
Market Reaction to the Budget: Budget 2024 Tax Updates
- Election Results and Budget Not Up to Expectations: Both the election outcomes and the budget announcements did not meet market expectations.
- Market Passed Stress Tests: Despite challenges, the market has managed to recover quickly from downturns.
- Quick Recovery: The recovery after market drops has been swift.
- Market Strength: The market has demonstrated resilience, with significant cash reserves ready for investment.
- Under-Invested Funds: Many investors and funds are still holding substantial cash, ready to be deployed after the budget.
- Potential for Major Drops: Given the strong retail flow, the market is unlikely to see significant declines.
Market Outlook Post-Budget: Budget 2024 Tax Updates
- No Change in Long-Term View: The long-term investment outlook remains positive.
- Moderate Gains: While gains may be slower and smaller, there is still potential for profit.
- Index Management: Certain sectors will remain strong while others may see profit booking.
- Support from FMCG, IT, and Pharma: These sectors will support the index.
- Weakness in Metals and Banks: These sectors might underperform.
- Buying in Oil & Gas: There will likely be buying interest in relatively cheaper stocks, like those in the oil and gas sector.
- Nifty Range: Nifty is expected to trade in the 24,000-25,000 range, with strong support at 24,000-24,200 and profit booking at 24,800-25,000.
- Neutral to Negative Outlook for Bank Nifty: The Bank Nifty index will be neutral to negative until results from ICICI and Axis are announced.
- High FIIs Long Positions: Foreign Institutional Investors (FIIs) still hold a significant number of long positions at 74%.
- Risk from FIIs Selling: The market risks a downturn if FIIs start selling.
- Impact of Block Deals and IPOs: Increased block deals and IPOs could reduce market liquidity.
Conclusion: Budget 2024 Tax Updates
Despite the initial negative reaction to the budget, long-term investors should maintain their positions, focusing on sectors like FMCG, IT, and Pharma. While some sectors might experience profit booking, the overall market outlook remains stable with opportunities for gradual growth. Investing in relatively undervalued sectors like oil and gas can be beneficial. Keeping an eye on FIIs’ activities and market liquidity is crucial for navigating post-budget market dynamics.
Also read: BUDGET 2024-2025 NIRMALA SITHARAMAN
