Share market recovers Rs 3.5 lakh crore wealth lost on Budget day, as Sensex, Nifty rebound

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February 04, 2020 1:03 PM

In the Budget bloodbath in the share market, the BSE Sensex had lost close to Rs 3.50 lakh crore in market capitalisation as Finance Minister Nirmala Sitharaman read out her Budget proposals. Sensex has recuperated and has regained all the losses made.

BSE Sensex is up 768.45 or 1.93 per cent at 40,640 points while the broader NSE Nifty 50 was up 229 or 1.96 per cent and sitting above the 11,900 mark.

In the Budget bloodbath in the share market, the BSE Sensex had lost close to Rs 3.50 lakh crore in market capitalisation as Finance Minister Nirmala Sitharaman read out her Budget proposals. Sensex slipped 1,000 points as the Dalal Street was not impressed by a budget that wanted to tax dividend in the hands of recipients, and failed to address the issue of Long Term Capital Gains Tax. However, since that large fall Sensex has recuperated and has regained all the losses made in terms of market capitalisation. Currently, the market capitalisation of Sensex sits at Rs 156.24 lakh crore, similar to what it was just before the Budget was presented.

BSE Sensex is up 768.45 or 1.93 per cent at 40,640 points while the broader NSE Nifty 50 was up 229 or 1.96 per cent and sitting above the 11,900 mark. Sectoral indices such Nifty Bank, which was up 689 or 2.30 per cent on Tuesday and Nifty FMCG which gained 1.20 per cent in early trade on Today showed positive signs as most of the companies listed among them traded in the green. Broad market index Nifty Midcap 50 was up Rs 64.05 points or 1.32 per cent along with Nifty Smallcap 50 which gained 1.76 per cent.

As fears of Coronavirus failed to recede, crude oil prices dropped, on the back of reduced demand from China. Brent Crude was at $54.85 per barrel down from $57 last week. As crude oil prices slip India benefits with cheaper oil coming in. India imports 80% of its oil for domestic needs. Although, US West Texas Intermediate (WTI) crude was up 32 cents, or 0.6 per cent, at $50.43 a barrel. According to Reuters, oil prices could further slide as OPEC member nations are looking to cut their oil imports.

A gain in the Rupee value too nudged the markets towards growth. The Indian rupee rose 0.23 per cent or 16 paise against the US dollar. It was trading at 71.20 per dollar level.

On Monday shares of companies with a high dividend payout and MNCs gained, as the market came to terms with the decision of the Finance Minister to tweak the way dividend is taxed. The Nifty MNC index gained 2.35 per cent on the National Stock Exchange led by the gains in Nestle India, Hindustan Unilever, Castrol India, and Britannia. With DDT now gone corporates were free from the additional tax burden on them on accounts of dividend paid by them. Nestle India and HUL hit a 52-week high.

Indian Markets also made use of how Global markets regained value. Dow ended Monday rising 0.5 per cent, S&P 500 gained 0.7 per cent and Nasdaq gained 1.3 per cent. Chinese markets too were able to stabalise to some extent as officials tried to calm fears of Coronavirus outbreak. The Shanghai Composite was up 1.3 per cent, The Shenzhen Component Index jumped 2.9%. Meanwhile, Japan’s Nikkei 225 gained 0.5 per cent.

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