Sensex, Nifty end flat in highly volatile trade

Benchmark indices Sensex and Nifty ended flat in a special trading session on Saturday as investors saw little coming in from the Finance Minister Nirmala Sitharaman for retail investors and the overall markets in the Union Budget.

But, buying in consumption-related sectors after Sitharaman exempted annual income of up to Rs 12 lakh from income tax and rejigged tax slabs as part of her reformist Budget prevented any major fall in the markets.

The markets were open on Saturday due to the presentation of the Union Budget.

In a day market with heavy volatility, the 30-share BSE benchmark Sensex eked out a marginal gain of 5.39 points or 0.01 per cent to settle at 77,505.96.

During the day, it hit a high of 77,899.05 and a low of 77,006.47, gyrating 892.58 points.

The NSE Nifty dipped 26.25 points or 0.11 per cent to settle at 23,482.15.

Intra-day, the benchmark scaled a high of 23,632.45 and a low of 23,318.30.

Markets were rallying for the past four days.

"The market has responded to the Union budget with a mixed view, primarily due to the modest 10 per cent YoY increase in capex for FY26, falling short of expectations.

"Sectors like railways, defense, and infra are affected on which the market relies for the performance, dampening the sentiment," Vinod Nair, Head of Research, Geojit Financial Services, said.

On the other hand, Nair said, consumption-based sectors, which are expected to benefit the most, had a low effect on the broad market due to their modest market mix position.

"While the Budget failed to cheer the markets, sectoral stocks from consumer durables, FMCG, and automobile space attracted significant buying interest after the government announced major income tax relief for the salaried class.

"With salaried income up to Rs 12 lakh per annum exempted from any tax, consumption is expected to get a major boost which is reflected positively across most of the consumption-related sectors," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

In a relief to the middle class, Sitharaman exempted annual income of up to Rs 12 lakh from income tax and rejigged tax slabs as part of her reformist Budget.

Presenting her eighth straight Budget in the Lok Sabha, Sitharaman laid out a blueprint for next generation reforms including raising FDI limit in insurance sector, simplification of tax laws, cutting duties on intermediaries while providing enhanced fiscal support for welfare measures.

This she did while sticking to the fiscal consolidation roadmap that projected the fiscal deficit to come down to 4.4 per cent of the GDP in the financial year 2025-26.

For the current financial year fiscal deficit has been pegged at 4.8 per cent of GDP.

"The Union Budget largely played to our expectations, particularly with the much-needed income tax relief for the middle class, which will drive consumption and economic growth.

"No changes were made to Securities Transaction Tax or capital gains tax, as anticipated," Pranav Haridasan, MD and CEO, Axis Securities, said.

From the 30-share blue-chip pack, Zomato surged over 7 per cent. Maruti, ITC Hotels, ITC, Mahindra & Mahindra, Asian Paints, Titan and IndusInd Bank were among the biggest gainers.

Power Grid, Larsen & Toubro, NTPC, UltraTech Cement, HCL Tech, Tech Mahindra, Infosys and Adani Ports were among the laggards.

"While the markets might have anticipated a more relaxed fiscal approach, the current stance is satisfactory.

"Overall, the budget is well-received, incorporating numerous reforms aimed at increasing farm incomes and supporting farmers.

"There are also considerable measures in place to assist MSMEs and to boost exports, making this a well-rounded budget that addresses the diverse needs of the populace," Vikas Khemani, Founder, Carnelian Asset Management & Advisors, said.

Asian markets are closed on Saturday due to holidays. European markets were also closed.

According to Vishal Kampani - Vice Chairman and Managing Director, JM Financial Ltd, the budget has touched upon all key elements to accelerate economic growth.

It has successfully managed to strike a balance among the trinity – offering fiscal stimulus to consumption, maintaining the fiscal glide path and undertaking reforms to boost growth.

"All in all, it is a growth-focused budget which will boost all the growth levers – manufacturing, access to credit, exports, employment generation, innovation and technology development, sustainability, etc. which will have a multiplier impact on the economy," Kampani said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,188.99 crore on Friday, according to exchange data.

Global oil benchmark Brent crude dipped 0.29 per cent to $76.67 a barrel.