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Below is the Views On Post Budget Market By KIFS Trade Capital

Post Budget Market

Equity market raised a red flag on budget day, fueling the concerns over health of domestic economy. Major selloff was observed on Saturday over failed budget expectations. The major reasons contributed for sell off was increase in fiscal deficit target to 3.8% from 3.3%, investors were also disappointed on LTCG relief front and DDT failed to lift market sentiment as DDT tax is still viable in hands of receipts. So overall no major spending or stimulus further contributed the market sentiments.

Income tax was already expected which cause some immediate positive reaction in some consumption stock but later they witness sell off at higher levels. The cut in income tax comes with a rider of giving up exemptions which are also one the reason for disappointment, especially life insurance stocks fell sharply because it is expected that those forgoing exemptions to move to lower tax regimes may not opt for life insurance.  

This resulted into key bench mark index slipping by 2.51% making a low of 11633.30 and bank index slipping to 3.28% making a low of 29753.If we do sectorial analysis all the indices closed in red except IT sector.  Government missed the quick fixes the sectors needed urgently and focused more on long term vision this brought bear movement in sectors like energy, insurance, health-care & realty.

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