Stock Market Update: Sensex, Nifty Open In Red Day After Budget Hikes STT, Tax On Equity Gains

Benchmark indices opened in negative territory, the day after the Union Budget 2024 announced a hike in taxes on short and long-term gains from equity investments.

New Delhi:The Indian benchmarks — NSE Nifty 50 and S&P BSE Sensex — opened marginally lower on Wednesday, a day after the Union Budget announced a hike in taxes on short and long-term gains from equity investments

The Sensex opened in red at 80,343.38, down 85.43 or 0.11 per cent while the Nifty 40 also opened in red at 24445.00, down 34 points or 0.14 per cent. The Bank Nifty showed a similar trend opening at 51657.70, lower by 120.60 points or 0.23 per cent. Among the sectoral stocks Bank, Auto, Financial Services, IT, Pharma, Private Bank, Realty, and Healthcare traded in red during the initial hours of the trade.

On the other hand the sectoral stocks of FMCG, Media, Metal, PSU Bank, Consumer Durables, Oil and Gas traded in red. The stock market experienced significant volatility during the announcements of the Union Budget on Tuesday.

The Budget hiked the long-term capital gains (LTCG) tax on equities to 12.5% from the previous 10%, and the short-term capital gains (STCG) tax to 20% from 15%. However, the LTCG tax exemption limit was also raised to Rs 1.25 lakh from Rs 1 lakh.

In her Budget speech, Sitharaman also increased the securities transaction tax (STT) rate for equity and index trades from 0.01 per cent to 0.02 percent. She said that the STT on futures and options of securities is proposed to be increased to 0.02 and 0.1 percent, respectively.

Market experts said that the higher taxes on F&O was expected and this is being done to reduce the excessive speculative trades in the market. They also feel that the market volatility may continue for the short term.

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