On a special Saturday trading session, India’s benchmark indices, Sensex and Nifty, ended flat following Finance Minister Nirmala Sitharaman’s Union Budget 2025 presentation. While there were some tax reliefs for the middle class, the markets did not react strongly, as investors found little that would directly benefit retail investors in the long run.
The 30-share BSE benchmark Sensex closed marginally higher, gaining just 5.39 points or 0.01% to settle at 77,505.96. During the day, it touched a high of 77,899.05 and a low of 77,006.47, with a volatility range of 892.58 points. On the other hand, the NSE Nifty saw a slight dip, losing 26.25 points or 0.11%, closing at 23,482.15. It touched a high of 23,632.45 and a low of 23,318.30 during the day.
The session was marked by a high level of volatility, especially as the markets had been rallying in the previous four trading days. The mixed market reaction to Sitharaman’s budget was largely due to expectations falling short in several key areas, particularly capital expenditure (capex) and fiscal measures. “The modest 10% YoY increase in capex for FY26 failed to meet expectations, with sectors like railways, defense, and infrastructure—on which the market has relied—feeling the impact,” said Vinod Nair, Head of Research at Geojit Financial Services.
#MarketClosing Comment by Mr. Vinod Nair, Head of Research @GeojitFinancial#MarketUpdate #StockMarketUpdate #StockMarketIndia #stockmarket #Sensex #Nifty #StockMarketNews #intraday #sharemarket #markets #UnionBudget2025 #IncomeTax #Infrastructure #Budget2025 #GeojitFinancial pic.twitter.com/ZfDvvJshVJ
— Geojit Financial (@GeojitFinancial) February 1, 2025
However, there was some optimism within consumption-related sectors, buoyed by Sitharaman’s announcement that annual income up to Rs 12 lakh would be exempted from income tax. This move, along with a rejigging of tax slabs, was expected to benefit the middle class and boost consumption. Yet, despite these reforms, the consumption sector’s overall impact was muted due to its modest market position.
Presenting her eighth straight budget in the Lok Sabha, Sitharaman focused on next-generation reforms, which included raising the Foreign Direct Investment (FDI) limit in the insurance sector, simplifying tax laws, and cutting duties on intermediaries. At the same time, she adhered to the fiscal consolidation roadmap, projecting the fiscal deficit to come down to 4.4% of GDP in FY26, compared to 4.8% for the current year.
FICCI Senior Vice President Anant Goenka commended the budget for addressing two key industry concerns: boosting consumption and supporting manufacturing. Century Plyboard Chairman, Sajjan Bhajanka, noted that the budget was balanced with no major tax hikes, which favored the middle class.
The Union budget covered the biggest need of the industry, which was to improve consumption, and the Hon’ble FM over-delivered on that front. Secondly, the focus on manufacturing has been very promising. These are two big positives that we see. The other theme that we saw across… pic.twitter.com/dDRl9dfJYx
— FICCI (@ficci_india) February 1, 2025
On the stock market front, Zomato emerged as a standout performer, surging over 7%. Other gainers included Maruti, ITC Hotels, Mahindra & Mahindra, Asian Paints, Titan, and IndusInd Bank. On the flip side, shares of Power Grid, Larsen & Toubro, NTPC, UltraTech Cement, and HCL Tech saw significant declines.
Vandana Jain, Co-founder of Nubra, commented on the budget’s strategic approach, stating, “The budget wasn’t flashy, but it was strategic. The goal? Grow GDP and create conditions where money moves faster.”
UNION BUDGET 2025-26: The government didn’t make noise, but they made moves. 👀
And if you look closely, the capital markets are at the centre of it all.
The budget wasn’t flashy, but it was strategic. The goal? Grow GDP. But instead of announcing bold reforms, they focused on…
— Vandana Jain (@VJainofficial) February 1, 2025
Among the top gainers of the day were Blue Star and Kaveri Seed, whose shares saw sharp increases of 8.09% and 7.71%, respectively. In contrast, stocks like Rail Vikas Nigam and SBI Life Insurance saw considerable losses, with declines of up to 7.25%.
As the markets remained closed in Europe and Asia for the day, U.S. markets ended lower on Friday, adding to the cautious sentiment in global markets.
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