Equity market investors have given a mixed reaction to the Union Budget, which announced sizeable income tax relief for the middle class while staying firmly on the fiscal consolidation roadmap. On the one hand shares of consumer-focused sectors surged on the expectation that the budget would boost demand. But on the other, shares of infrastructure and capital goods companies tumbled sharply amid tepid capital expenditure spending.
Eventually, the 30-share BSE Sensex closed at 77,505.96 level, up just 5 points or 0.01 per cent. The broader NSE Nifty50 rose 26 points or 0.1 per cent to end the day at 23,482.15.
The Star of the day were clearly consumer stocks. FMCG companies like Emami, Godrej Consumer Products, Tata Consumer, Honasa Consumer, department store operator Trent, beauty and cosmetics retailer Nykaa, hospitality companies Indian Hotels, Lemon Tree Hotels, travel portal Easy Trip Planners, food delivery and quick commerce firms Zomato and Swiggy, all rose between 2-7 per cent.
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Consumer durables firms like Blue Star, Crompton Greaves Consumer, Havells, Voltas and Whirlpool jumped 3 per cent to over 13 per cent. Auto stocks also rose, with Maruti Suzuki surging 5 per cent and two-wheeler makers TVS Motor, Bajaj Auto and Hero Motocorp accelerating up to 4 per cent.
"After a long time, the middle class has a reason to cheer. By moving the tax exemption to Rs 12 lakh, the current income tax proposal is going to leave a lot of money in the hands of the middle class. While the government is foregoing Rs 1 lakh crore of income tax, we think the increase in consumption can help offset some of the exchequer loss," said Raghvendra Nath, MD Ladderup Wealth Management.
Core sector stocks on the other hand saw a huge sell-off, post the Budget. ABB, Siemens, NBCC, Cummins, Bharat Heavy Electricals, Kalpataru Projects, Larsen & Toubro, IRB Infra, Power Grid, NTPC, JSW Energy all declined between 2 per cent to 7 per cent.
"The Union Budget was clearly a confluence of consumption push and capex moderation with fiscal prudence taking precedence over growth. We note that FY2026 capex allocation of Rs 11.2 lakh crore, a growth of 9.8 per cent over FY2025 revised estimates, is a bit modest, albeit, clearly reflects the government commitment towards fiscal prudence with fiscal deficit pegged at 44 per cent in FY26, versus 4.8 per cent in FY25 revised estimates," said Pankaj Pandey, head of research at ICICI Direct, the retail broking arm of ICICI Securities.
Real estate stocks also rose on Saturday with Godrej Properties, Oberoi Realty, Macrotech, Sobha, DLF and Prestige among others rising up to 6 per cent.
There were several announcements in the budget for the realty sector. Under the Special Window for Affordable and Mid-Income Housing (SWAMIH) 50,000 units in stressed housing projects have been completed, and keys handed over to home-buyers. Another 40,000 units will be completed in 2025. Sitharaman on Saturday announced Rs 15,000 crore SWAMIH Fund 2 with the aim for expeditious completion of another 1 lakh units.
Notably, as per the proposal in this budget, now a taxpayer can claim relief on two self-occupied houses. This coupled with the income tax benefits given to the middle class is expected to housing demand.
"The Rs 15,000 crore SWAMIH Fund 2 is a crucial step towards expediting stalled housing projects, ensuring homebuyers' interests are safeguarded. Additionally, allowing benefits for two self-occupied properties without conditions will further boost home ownership," said Boman Irani, president, CREDAI (Confederation of Real Estate Developers Association) National.
