particularly how the Sensex and Nifty fell despite Finance Minister Nirmala Sitharaman's tax incentives

 particularly how the Sensex and Nifty fell despite Finance Minister Nirmala Sitharaman's tax incentives

On February 1, 2025, Indian stock markets experienced a downturn following the presentation of the Union Budget by Finance Minister Nirmala Sitharaman. The benchmark indices, BSE Sensex and NSE Nifty 50, both declined by 0.56%, closing at 77,069.85 and 23,372.35 points, respectively. 

REUTERS.COM

The market's negative reaction was primarily attributed to the proposed increase in the Securities Transaction Tax (STT) on futures and options (F&O) trades. This move raised concerns among investors about higher transaction costs, leading to a sell-off in the markets. 

THEHINDU.COM

Despite the overall decline, sectors linked to consumption, such as fast-moving consumer goods (FMCG) and automotive, saw gains. The FMCG sector rose by 3.1%, while the auto sector increased by 2.1%. These upticks were driven by cuts in personal income tax rates aimed at boosting consumer spending. 

REUTERS.COM

Additionally, insurance companies experienced a rise in their stock prices after the government announced an increase in the foreign direct investment (FDI) limit to 100% in the insurance sector. Companies like SBI Life and HDFC Life saw gains of approximately 2.3% each. 

REUTERS.COM

particularly how the Sensex and Nifty fell despite Finance Minister Nirmala Sitharaman's tax incentives

In summary, while the budget introduced measures to stimulate consumption and attract foreign investment, the hike in STT on F&O trades led to a cautious response from investors, resulting in a mixed performance across different sectors.

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