Union Budget 2025: A Closer Look at Market Reactions

In an unprecedented move, the Union Budget 2025 was met with a tepid response from investors during a special trading session on Saturday. Despite the Finance Minister's ambitious taxophone play, the markets remained largely unshaken. The Sensex and Nifty indices showed minimal movement, with the Sensex inching up by a mere five points to 77,506, while the Nifty saw a slight dip of 150 points, settling at 23,482.

Investor Sentiment and Sectoral Movements

While sectors like real estate, FMCG, consumer durables, consumer discretionary, and automobiles experienced a surge in bullish sentiment, this was counterbalanced by significant selling in capital goods, power, and utilities sectors. Despite the holiday for most institutions, foreign funds were aggressive sellers, whereas domestic funds emerged as net buyers, as per BSE data.

Long-Term Optimism Amidst Short-Term Volatility

Market veterans remain optimistic about the long-term impact of the Budget proposals on the economy and the stock market. Navneet Munot, MD & CEO of HDFC Mutual Fund, highlighted the potential for policy prudence and growth support to enhance India's appeal to both foreign and domestic investors. The Finance Minister's income-tax proposals are anticipated to increase disposable income, potentially channeling additional funds into the stock market.

Empowering the Indian Consumer

The Budget places the Indian consumer at the heart of its strategy, aiming to stimulate demand and foster economic growth. Sandeep Bagla, CEO of Trust MF, emphasized the critical role of the Indian middle class and the private sector in driving the economy forward. With measures like simplified tax structures and reduced surcharges, the Budget seeks to boost consumption, savings, and investments, supporting key sectors and generating a multiplier effect on the economy.