The last trading day, Sunday, saw a huge decline in the stock market, with Sensex and Nifty falling unexpectedly. The turmoil started with the announcement of increase in Securities Transaction Tax (STT) in the Budget. However, after a slow start on Monday, Sensex and Nifty recovered from the Budget impact and suddenly rose sharply. After opening in the red zone, BSE Sensex rose by over 450 points, while NSE Nifty also followed suit and crossed the 24,900 level. However, after touching this level, the momentum of the index appeared to be slowing down.
Budget spoiled the mood of the market
When the Union Budget was presented on Sunday, Finance Minister Nirmala Sitharaman announced a hike in the Securities Transaction Tax (STT), and soon after, the Sensex and Nifty fell. The 30-share Sensex of Bombay Stock Exchange fell nearly 2400 points. The Nifty-50 of the National Stock Exchange also fell sharply, falling by more than 750 points. Amid this market turmoil, investors lost Rs 11 lakh crore.
Slow start, then picked up speed
Looking at the trading activity in the stock market on Monday after the Budget, the BSE Sensex opened at 80,555, lower than its previous close of 80,722, and then fell further to 80,480. But within minutes of this initial fall, the market reversed course, and the Sensex surged by a massive 466 points to reach 81,211. NSE Nifty opened lower on Monday, trading at 24,796 compared to its previous close of 24,825. However, as the Sensex gained momentum, the index also gained momentum, rising by more than 100 points to reach 24,942.
Was this the reason for recovery in the market?
Regarding the reasons for the sudden rise in the stock market, it is believed that investors have now understood the impact of the budget announcements. The increase in Securities Transaction Tax (STT) is likely to have little impact on general and long-term investors, while the burden will mainly fall on F&O traders and those with high transaction volumes. This improved sentiment along with strong performance of many big companies supported the market rally.
These stocks supported the market:
Now, let us look at those stocks which played an important role in giving a sudden boost to the falling market. Among the top 10 stocks, Adani Ports (3.30%), Asian Paints (2.50%), L&T (2.30%), and Reliance (1.35%) were trading higher in the BSE large-cap category.
Besides, in the mid-cap segment, HPCL (5%), GMR Airports (3.30%), Bharat Forge (2.10%), and Dixon Technologies (2%) were also trading with significant gains. In the small-cap category, IIFL (3.62%) and Hindustan Copper (3.50%) were also trading higher.
