The key equity indices remained volatile on Budget Day, ending near the flat line despite key announcements by Finance Minister Nirmala Sitharaman in the Union Budget 2025-26. The Nifty 50 settled below the 23,500 mark, after touching an intraday high of 23,632.45 in mid-morning trade. Tax relief boosted consumption stocks (realty, autos, FMCG, consumer durables), but the market's overall reaction to the budget was largely muted.
The S&P BSE Sensex added 5.39 points or 0.01% to 77,505.96. The Nifty 50 index lost 26.25 points or 0.11% to 23,482.15.
Trent (up 7.45%), ITC (up 3.33%) and Mahindra & Mahindra (up 2.96%) boosted the indices.
Bharat Electronics (down 3.76%), Larsen & Toubro (down 3.36%) and Infosys (down 1.50%) were major drags.
In the broader market, the S&P BSE Mid-Cap index declined 0.49% and the S&P BSE Small-Cap index added 0.28%.
The market breadth was positive. On the BSE, 2081 shares rose and 1829 shares fell. A total of 127 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, dropped 13.24% to 14.10.
Union Budget 2025: Tax Relief, Infrastructure Push, and Focus on Key Sectors
Finance Minister Nirmala Sitharaman delivered the Union Budget 2025, outlining a comprehensive vision for India's economic growth and inclusive development. The budget emphasizes key sectors like education, technology, manufacturing, healthcare, access to credit, and agriculture, while prioritizing fiscal responsibility. A major highlight is significant tax relief for the middle class.
In a move that will likely resonate with taxpayers, Sitharaman announced that individuals with an income of up to Rs 12 lakh will now be exempt from income tax under the new tax regime. This measure aims to provide substantial financial relief to the middle class. The new tax slabs under this regime are as follows: Rs 4 to 8 lakh at 5%, Rs 8 to 12 lakh at 10%, Rs 12 to 16 lakh at 15%, Rs 16 to 20 lakh at 20%, Rs 20 to 24 lakh at 25%, and Rs 24 lakh and above at 30%.
The Finance Minister reiterated the government's commitment to fiscal consolidation, aiming to maintain a downward trajectory for the fiscal deficit and reduce central government debt as a percentage of GDP. The budget projects total receipts for 2024-25 at Rs 31.47 lakh crore and total expenditure at Rs 47.16 lakh crore. The fiscal deficit target for FY25 is set at 4.8%, with a further reduction to 4.4% planned for FY26.
A new Income Tax bill, focused on trust-based and streamlined compliance, will be introduced next week. Several measures aim to streamline tax processes, including faceless assessments, faster tax returns, and five Vivad Se Vishwas schemes for expedited dispute resolution. To attract foreign investment, the FDI limit in the insurance sector has been increased from 74% to 100%. Mergers and acquisitions will be facilitated through quicker approvals and expanded regulations, improving the ease of doing business.
The Union Budget 2025-26 allocated Rs 6,81,210.27 crore to the Ministry of Defence (MoD). This represents a 9.53% increase from the Budgetary Estimate of FY 2024-25 and constitutes 13.45% of the total Union Budget (the highest allocation among ministries). Of the total allocation, Rs 1,80,000 crore (26.43%) is earmarked for capital outlay on defence services, a 4.65% increase from the Budgetary Estimate of FY 2024-25. Within this, Rs 1,48,722.80 crore is designated for capital acquisition (the modernization budget), while the remaining Rs 31,277.20 crore will fund research & development and infrastructure development.
Technology will be a major focus, with the establishment of three Centers of Excellence for Artificial Intelligence (AI) with a Rs 500 crore outlay, focusing on AI in education. A National Manufacturing Mission will support clean technology production, including domestic manufacturing of electric vehicle (EV) batteries and solar panels. Five new national skilling centers will be established, and existing IITs will expand infrastructure to accommodate 6,500 more students. Atal Tinkering Labs will be introduced in government schools to foster innovation.
Infrastructure development receives a boost through the PM Gatishakti initiative, which will provide the private sector with access to crucial data and maps for improved logistics and infrastructure planning. Tourism, a significant employment generator, will be promoted through collaboration with states to develop 22 top tourism destinations. Energy security is prioritized, with a plan to develop 100 gigawatts of nuclear energy by 2047. Basic Customs Duty (BCD) exemption on cobalt powder, lithium-ion battery waste, scrap, and 12 other critical minerals will ensure the availability of these materials for manufacturing.
Healthcare will be strengthened by establishing daycare cancer centers in all district hospitals within three years. Medical tourism will be promoted through public-private partnerships and easier visa norms. Access to credit for micro, small enterprises, startups, and exporters will be significantly expanded. The credit guarantee cover for micro and small enterprises will double to Rs 10 crore, unlocking substantial additional credit. Startups will see their cover rise to Rs 20 crore. Exporter MSMEs will be eligible for term loans up to Rs 20 crore, and micro-enterprises on the Udyam portal will receive customized credit cards with a Rs 5 lakh limit.
Entrepreneurship will be supported by a New Fund of Funds for Startups, with an additional Rs 10,000 crore, doubling the existing allocation. A Food Processing Institute will be established in Bihar, and a new Manufacturing Mission will support Make in India. A special scheme will offer term loans to 5 lakh women-led businesses. Agriculture receives substantial support through the PM Dhan Dhanya Krishi Yojana, aimed at enhancing productivity in 100 districts. The Developing Agri Districts Programme will improve irrigation and credit access for 1.7 crore farmers. NAFED and NCCF will directly procure pulses from farmers to ensure self-reliance. A Makhana Board will be set up in Bihar, and a National Mission on High-Yielding Seeds will boost farm productivity.
Sitharaman emphasized investment as one of the major engine of growth, highlighting transformative reforms across various sectors. The budget prioritized GYAN (Garib, Youth, Annadata, and Nari), energy security, economic resilience, and export promotion. Agriculture, MSMEs, and exports are positioned as other key drivers of India's economic expansion. The 2025-26 budget aims to build household confidence and empower the middle class. Sitharaman highlighted India's rapid economic growth and growing global confidence in its potential, emphasizing the next five years as crucial for achieving Sabka Vikas (inclusive development).
Meanwhile, the Budget session of Parliament commenced on January 31 with President Droupadi Murmu's address and will be conducted in two parts. The first part will run until February 13, while the second will be held from March 10 to April 4.
Economy:
India's fiscal deficit for the first nine months of the current fiscal year stood at Rs 9.14 lakh crore, or 56.7% on the annual estimates, data released by the Controllerer General of Accounts (CGA) showed on Friday, according to media reports. The fiscal deficit widened from 55% in the comparable year- earlier period. Total receipts for the period stood at Rs 23.18 lakh crore, while overall government expenditure in April to December was at Rs 32.32 lakh crore.
The combined index of Eight Core Industries (ICI) increased by 4% (provisional) in December 2024 as compared to the index in December 2023. The production of coal, electricity, steel, cement, refinery products, fertilizers, and crude oil recorded positive growth in December 2024.
The final growth rate of Index of Eight Core Industries for September 2024 increased by 2.4%. The cumulative growth rate of ICI during April to December 2024'25 is 4.2% (provisional) as compared to the corresponding period of last year.
Global Markets:
The Trump administration announced new tariffs on imports from Mexico, Canada, and China, starting Saturday. These tariffs are partly in response to illegal fentanyl distribution. Potential tariffs include 25% on Mexican and Canadian imports, 10% on Chinese goods, and future tariffs on chips, oil, gas (possibly by February 18th), steel, aluminum, and copper. Trump insists these tariffs are unavoidable and will generate substantial revenue, even hinting at possible European tariffs. He contrasted the US's historical reliance on tariffs with its current dependence on income tax.
The news caused US stock market declines. At the close in NYSE, the Dow Jones Industrial Average fell 0.75%, while the S&P 500 index declined 0.5%, and the NASDAQ Composite index declined 0.28%.
Apple shares closed lower as the broader market selloff erased earlier gains. The company expects sales growth in the low- to mid-single digits for its fiscal second quarter, easing concerns about flagship handset sales, which slightly missed estimates in the holiday season. CEO Tim Cook remains optimistic, citing Apple Intelligence (AI features) as a driver of future sales.
Exxon Mobil stock fell 2.5%, despite exceeding fourth-quarter profit expectations. Higher oil and gas production helped offset lower crude prices and weaker refining margins.
Stocks in Spotlight:
Shares of defence companies slumped as the government's defence budget allocation for FY26 failed to meet investor expectations.
Mishra Dhatu Nigam (down 9.15%), Paras Defence and Space Technologies (down 7.10%), Apollo Micro Systems (down 5.43%), Data Patterns (India) (down 4.46%) Hindustan Aeronautics (down 4.21%), Bharat Dynamics (down 3.77%) and Bharat Electronics (down 3.76%) slumped.
Maruti Suzuki India advanced 4.98% after the company's total sales increased 6.46% to 212,251 units in January 2024 as against 199,364 units sold in January 2023.
Meanwhile, the car manufacturer's total production marginally rose to 206,851 units in January 2024 as against 204,876 units recorded in January 2023.
Oil & Natural Gas Corporation (ONGC) fell 1.96% after the company's standalone net profit fell 16.7% to Rs 8,239.92 crore in Q3 FY25 compared with Rs 9,891.71 crore in Q4 FY24. Revenue from operations declined 3.08% YoY to Rs 33,716.80 crore in Q3 FY25.
Hero Motocorp slipped 1.43% after the company announced that Niranjan Gupta has stepped down as the CEO of the company effective 30 April 2025, to pursue other opportunities.
Quess Corp climbed 3.11% following the announcement of a share purchase by Fairbridge Capital (Mauritius), a promoter of the company.
RailTel Corporation of India slipped 6.79% after the firm said that it has received the work order from Department of Education Samagra Shiksha for supply and service amounting to Rs 15.98 crore.
Vinati Organics rallied 3.97% after its net profit gained 21.78% to Rs 93.70 crore in Q3 FY25 as against Rs 76.94 crore in Q2 FY25. Revenue from operations spiked 16.44% to Rs 521.68 crore in Q3 FY25 over Q2 FY25. PBT jumped 22.76% to Rs 126.62 crore in Q3 FY25 over Q2 FY25.
Vishal Mega Mart rallied 6.53% after the company's consolidated net profit jumped 27.9% to Rs 262.71 crore in Q3 FY25 compared with Rs 205.36 crore in Q3 FY24. Revenue from operations increased 19.53% YoY to Rs 31,35.93 crore in Q3 FY25.
Aster DM Healthcare slipped 3.11% after the company's consolidated net profit tumbled 68.31% to Rs 56.79 crore in Q3 FY25, compared with Rs 179.21 crore posted in Q3 FY24. However, revenue from operations jumped 9.96% year on year (YoY) to Rs 1,049.81 crore during the quarter ended 31 December 2024.
Quess Corp climbed 3.11%, following the announcement of a share purchase by Fairbridge Capital (Mauritius), a promoter of the company.
Fairbridge Capital (Mauritius), a subsidiary of Fairfax Financial Holdings, acquired 3,77,218 equity shares of Quess Corp, representing 0.25% of the company's paid-up capital. The purchase was executed through open market transactions on stock exchanges.
As on December 2024, Fairbridge Capital Mauritius held 5,04,76,237 shares, or 33.95% stake in the company. Total promoter stake in the company stood at 56.57%
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