Tax hike in Budget may have impacted sentiment, say experts
Foreign portfolio investors (FPIs) have sold shares worth ₹10,710 crore in the cash market from the day the Budget was announced. This after purchasing shares for six straight sessions totalling over ₹18,000 crore.
The Budget raised the long term capital gains tax by 25 per cent to 12.5 per cent and short term capital gains by 33 per cent to 20 per cent, which may have impacted sentiment, said experts.
Domestic institutional investors, on the other hand, have bought shares worth ₹6,986 crore in the past three sessions. They had been sellers in the previous six sessions.
Sensex recoup losses
Global stocks tumbled on Thursday after a tech-fuelled sell-off on Wall Street last night. Indian markets, however, recouped most of their losses with Sensex managing to close above the 80,000 mark amid buying in oil & gas and automobile stocks.
“The government’s commitment to improving consumption and bridging the gap for energy transition in the budget buoyed sectoral sentiments. Despite ongoing enthusiasm from retail investors in the broader market, the current high valuations are likely to prompt a shift towards large-cap stocks,” said Vinod Nair, Head of Research, Geojit Financial Services.
A long bull candle was formed at the lows on the daily chart on Thursday, indicating a possible comeback of bulls from the lower levels.
“Technically, this candle pattern signals a formation of bullish counterattack type pattern. The lack of selling pressure despite weak global market is signaling a chances of an upside bounce from here onwards,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.