SSPL WEALTH PVT LTD

End - Session

Detailed review of the post market session of the day.

Equities slide as LTCG hike bite, late buying cushions fall; VIX slumps below 13 mark

23-Jul-24 17:36 Hrs IST

The stock market saw minor cuts today as the Budget for 2024-25 was unveiled. Both Sensex and Nifty extended their losing streak to three sessions. Despite positive global cues, the Nifty50 closed below 24,500 after hitting an early high of 24,582.55. Profit booking in response to the Finance Minister's hike in long-term capital gains tax from 10% to 12.5% erased gains. However, last-hour buying helped the index recover slightly, ending the day on a flat note. FMCG and consumer durables shares rallies, while realty and PSU banks tumbled.

The S&P BSE Sensex fell 73.04 points or 0.09% to 80,429.04. The Nifty 50 index shed 30.20 points or 0.12% to 24,479.05.

In the broader market, the S&P BSE Mid-Cap index fell 0.74% and the S&P BSE Small-Cap index shed 0.18%.

The market breadth was negative. On the BSE, 1743 shares rose and 2160 shares fell. A total of 113 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, crashed 17.42% to 12.75.

Union Budget 2024:

Finance Minister Nirmala Sitharaman presented the Union Budget 2024-25, focusing on employment, skilling, MSMEs, and the middle class. Key highlights include:

1. Provision of Rs 11.11 lakh crore (3.4% of GDP) for capital expenditure.

2. Aiming to reduce the fiscal deficit below 4.5% next year and maintaining a declining central government debt-to-GDP ratio from 2026-27 onwards.

3. Launching five schemes to create employment and skilling opportunities for 4.1 crore youth over five years with a central outlay of Rs 2 lakh crore.

4. Allocating Rs 1.48 lakh crore for education, employment, and skilling, and Rs 1.52 lakh crore for agriculture and allied sectors.

5. Proposing an investment of Rs 10 lakh crore, including Rs 2.2 lakh crore in central assistance, over the next five years under PM Awas Yojana Urban 2.0 to address the housing needs of 1 crore urban poor and middle-class families.

6. Increasing the standard deduction for salaried employees from Rs 50,000 to Rs 75,000 and enhancing the family pension deduction from Rs 15,000 to Rs 25,000 in the new tax regime. In the new tax regime, income up to Rs 3 lakh will be taxed at zero; Rs 3 lakh to Rs 7 lakh will be taxed at 5%; Rs 7 lakh to Rs 10 lakh will be taxed at 10%; Rs 10 lakh to Rs 12 lakh will be taxed at 15%; Rs 12 lakh to Rs 15 lakh will be taxed at 20%; and income above Rs 15 lakh will be taxed at 30%.

7. Revising capital gains tax: short-term gains at 20% on certain financial assets, long-term gains at 12.5% on all financial and non-financial assets, and increasing the exemption limit for capital gains to Rs 1.25 lakh per year. Listed financial assets held over a year will be long-term, while unlisted financial and non-financial assets need a two-year hold. Unlisted bonds, debentures, debt mutual funds, and market-linked debentures will be taxed at applicable rates regardless of the holding period.

8. Abolishing the angel tax for all classes of investors to boost investment and the startup ecosystem.

9. Proposing that income from buy-back of shares by companies be chargeable as dividend in the hands of the recipient investor, with the cost of such shares treated as a capital loss.

10. Increasing the rates of Securities Transaction Tax (STT) on the sale of options in securities from 0.0625% to 0.1% of the option premium, and on the sale of futures in securities from 0.0125% to 0.02% of the traded price.

11. Setting up a venture capital fund of Rs 1,000 crore to expand the space economy by five times in the next 10 years.

12. Introducing the New Pension Scheme (NPS)-Vatsalya, allowing parents and guardians to contribute for minors, which can be converted into a normal NPS account when the beneficiary reaches adulthood.

13. Digitizing land records in urban areas with GIS mapping.

Overall, the budget aims to foster economic growth, reduce the fiscal deficit, and provide significant benefits to various sectors and the middle class.

Numbers to Track:

The yield on India's 10-year benchmark federal paper was up 0.04% to 6.970 as compared with previous close 6.967.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.7050, compared with its close of 83.6675 during the previous trading session.

MCX Gold futures for 5 August 2024 settlement tumbled 5.33% to Rs 68,846.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.15% to 104.47.

The United States 10-year bond yield fell 0.68% to 4.232.

In the commodities market, Brent crude for September 2024 settlement lost 16 cents or 0.19% to $82.24 a barrel.

Global Markets:

European stocks advanced while Asian stocks ended mixed on Tuesday. Singapore's consumer price index rose 2.4% year on year for June this compares to a 3.1% rise in May. The country's core inflation, strips out prices of accommodation and private transport.

On Tuesday, Wall Street rally fueled by strong earnings reports from major tech companies. Taiwan's market, led by semiconductor stocks, snapped a five-day losing streak.

This surge follows gains on Monday in the US, where the S&P 500 rose over 1% and the tech-heavy Nasdaq jumped 1.6%. Both indexes were recovering from their worst weekly performance since April. Investors seemed unfazed by the news of President Biden exiting the presidential race, instead focusing on upcoming earnings reports from tech giants Tesla and Alphabet. Both companies' stocks saw significant gains on Monday.

Stocks in Spotlight:

Hindustan Unilever (HUL) rose 1.17%. The FMCG major reported 2.67% rise in standalone net profit to Rs 2,538 crore in Q1 FY25 as compared to Rs 2,472 crore recorded in Q1 FY24. Revenue from operations was at Rs 15,166 crore in Q1 FY25, up 1.57% from Rs 14,931 crore reported in the same period a year ago.

HUL delivered underlying volume growth (UVG) of 4% in the quarter ended 30 June 2024. While, underlying sales growth (USG) was 2% due to the impact of price reductions taken during the year as the company passed on benefits of lower commodity prices to consumers.

Yatra Online (up 3.17%), Easy Trip Planners (+5.42%), Praveg (+0.84%) advanced after FM planned for the development of infrastructures of tourist spots through Budget 2024.

Coforge added 1.62%. The IT company's consolidated net profit fell 40.45% to Rs 133.2 crore in Q1 FY25 as compared to Rs 223.7 crore in Q4 FY24. However, Revenue from operations increased 1.79% to Rs 2,400.8 crore in Q1 FY25 as compared to Rs 2,358.5 crore reported in the preceding quarter same year.

ICRA shed 0.48% after the rating agency's net profit tumbled 11.88% to Rs 35.51 crore in Q1 FY25 as against with Rs 40.30 crore posted in Q1 FY24. ICRA's revenue from operartions stood at Rs 114.81 crore during the quarter, registering a growth of 11.78% as against with Rs 102.71 crore posted in the corresponding quarter previous year.

Gensol Engineering hit an upper circuit of 5% after the company announced that it has emerged as winning bidder for 116 MW (150 MWp) of solar projects in Gujarat with approx. EPC revenue of Rs 600 crore.

Suzlon Energy hit an upper circuit of 5% after the company reported consolidated net profit of Rs 302.29 crore in Q1 FY25, steeply higher than Rs 100.90 crore posted in Q1 FY24. Revenue from operations climbed 49.60% year on year (YoY) to Rs 2,015.98 crore in the quarter ended 30 June 2024.

Heritage Foods hit an upper circuit of 5% after its consolidated net profit zoomed to Rs 58.43 crore in Q1 FY25 as against Rs 16.74 crore recorded in Q1 FY24. Revenue from operations jumped 11.8% year on year (YoY) to Rs 1,032.67 crore in the first quarter of FY25. EBITDA jumped 133% YoY to Rs 93.8 crore while EBITDA margin improved by 472 bps to 9.08% during the quarter under review.

IPO Update:

The initial public offer (IPO) of Sanstar received 3,11,93,80,950 bids for shares as against 3,75,90,000 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (23 July 2024). The issue was subscribed 82.98 times.

The issue opened for bidding on Friday (19 July 2024) and it will close on Tuesday (23 July 2024). The price band of the IPO is fixed between Rs 90 to Rs 95 per share. An investor can bid for a minimum of 150 equity shares and in multiples thereof.