Home/Blogs/Understanding the Impact of the Interim Budget 2024 on the Stock Markets

Understanding the Impact of the Interim Budget 2024 on the Stock Markets

08 Feb 2024

Budget Day is an essential financial event for India. This year’s budget was a vote on account and the actual budget will be announced in the month of June when the ruling party comes into power. As the Finance Minister went on to announce various schemes that caused many stocks to rise and fall. Let us dive into the details: 

The NSE Nifty recorded a marginal increase of 0.03 per cent or 5.95 points, reaching 21,731.65 points, while the BSE Sensex stood at 71,806.44, showing a modest rise of 0.04 percent, equivalent to six points. During the noon trading session on the budget day, 3,820 stocks were actively traded, with 1,722 experiencing gains, 1,962 witnessing declines, and 136 stocks remaining unchanged. 

397 stocks reached their 52-week high, while 13 stocks touched their 52-week low. On budget days, investors focus on stocks expected to benefit from favourable announcements. Since the February budget is a vote-on-account budget with limited opportunities, attention was constrained. 

Within the Sensex companies, UltraTech Cement, Larsen & Toubro, Wipro, and Bajaj Finance saw significant declines in their stock prices. On the other hand, Maruti, Power Grid, Mahindra & Mahindra, and Tata Consultancy Services emerged as the top performers with notable gains.

 

The government developed favourable policies for renewable energy, fisheries, infrastructure, and railway stocks. Many stocks in these sectors saw a 5% to 8% growth. 

Here is a list of the top 6 takeaways from the budget of 2024: 

 

Capital Expenditure

Nirmala Sitharaman has raised the allocation for capital expenditure by 11.1%, totaling Rs 11.11 lakh crore, equivalent to 3.4% of the GDP. This significant increase is expected to stimulate economic activity and align with the long-term vision of a developed India.

 

Electric Vehicle

The Budget has ignited a surge in EV-related stocks by bolstering the electric vehicle ecosystem. Support for manufacturing and charging infrastructure is set to promote the wider adoption of electric buses within public transport networks, aided by a robust payment security mechanism.

 

Railway Emphasis

Following the triumph of the Vande Bharat trains, the finance minister disclosed plans to convert approximately 40,000 additional rail carriages into Vande Bharat coaches.

 

Expanding the "Lakhpati Didi" Initiative

The Budget proposes an expansion of the Lakhpati Didi scheme's target, increasing it from 2 crore to 3 crore beneficiaries. With a financial injection of Rs 1 lakh per household for one crore beneficiaries, this initiative holds the potential to elevate the economic status of rural women.

 

Solar Goals

Under the Suryodaya Yojana, the government aims to facilitate rooftop solarisation for one crore households, providing up to 300 units of free electricity monthly. This initiative could result in substantial monthly savings of up to Rs 15,000–18,000 for households. Solar power companies like Insolation Energy, Surana Solar, Solex Energy, and others are well-positioned to benefit from the rooftop solarisation scheme.

 

Tourism 

The budget also addressed enhancing tourism nationwide to attract international travellers and promote interstate travel. This initiative is expected to significantly increase revenue for both the government and local communities, as travellers are likely to spend more on accommodations, dining, and visiting monuments.

The government has emphasised the development of Lakshadweep, which has had a notable impact on the stock market, particularly leading to a surge in hotel stocks.

 

Conclusion 

It's essential to recognise that the impacts of a budget announcement take time to materialise. Governments introduce various schemes that often require several years to achieve their intended objectives. 

The budget serves as a guiding framework that directs investors' capital toward specific areas. When the government demonstrates a commitment to the growth of a particular sector, investors can allocate their funds to that sector in anticipation of future growth.

 

 

Related Articles on Budget 2024:  Expect Minimal Changes from Interim Budget 2024 | Full Budget vs. Vote on Account | Vote on Account vs. Interim Budget | Sectors to benefit from interim budget 2024 | Everything about Interim Budget | Announcements to expect from Interim Budget 2024 | Interim budget 2024 stock watchlist

Checkout more Blogs

You may also like…

Get Exclusive Updates

Be the first to read our new blogs

Intelligent investment insights delivered to your inbox, for Free, daily!

Open Demat Account
I wish to talk in South Indian language
By proceeding you’re agree to our T&C
Click here to see your activities