Market Overview: Gift Nifty Dips, Bajaj Finance Q1 Performance, ITC Share Surge, and Leading Stocks Today

Indian stock markets experienced a volatile trading session on Tuesday, influenced by the announcement of the Union Budget. Benchmark indices displayed fluctuating movements throughout the day, ultimately closing lower.

Benchmark Indices Performance

At the closing bell, the BSE Sensex declined by 73 points (0.1% down), while the NSE Nifty closed 30 points lower (0.1% down). Key gainers included NTPC, ITC, and Titan, whereas L&T, Hindalco, and ONGC were among the top losers. The BSE MidCap index dropped by 0.7%, and the BSE SmallCap index decreased by 0.2%.

Focus on Top Buzzing Stocks

Hero MotoCorp: The stock surged by 3% following Finance Minister Nirmala Sitharaman’s announcement of a substantial budget allocation of Rs 2.7 trillion for rural development, which includes significant spending on rural infrastructure.

Dixon Technologies: Conversely, Dixon Technologies’ shares fell by 6% after the Finance Minister revealed a reduction in customs duty on mobile phones, PCBA, and chargers to 15%.

Bajaj Finance Q1 Results

Bajaj Finance reported a lower-than-expected profit for Q1, attributed to higher provisions for bad loans. The company posted a consolidated net profit after tax of Rs 39.1 billion (US$ 467.5 million), slightly below analysts’ projections of Rs 40.3 billion. Notably, Bajaj Finance’s loan losses and provisions surged nearly 70% to Rs 16.9 billion, surpassing the estimated Rs 14.7 billion.

This increase in provisions stems from elevated losses in the personal loans segment, particularly among rural customers. The Reserve Bank of India’s mandate to increase capital requirements for personal loans and credit cards also contributed to the higher provisions. Additionally, finance costs rose by 38.5% to Rs 56.8 billion due to the RBI’s interest rate hikes.

ITC Share Price Surge

ITC Ltd’s shares jumped over 4%, becoming the second-biggest gainer on the Nifty 50. The lack of a tobacco tax hike in the Union Budget 2024 delighted investors, as ITC generates significant revenue from its cigarette business. The budget also included measures to boost employment and rural development, which are expected to drive demand for ITC’s consumer products. Other FMCG stocks like Tata Consumer Products, Hindustan Unilever, and Dabur India also saw gains of 3-4%.

Sugar Stocks Decline

Sugar stocks took a hit after the Union Budget failed to meet the industry’s expectations. Companies such as Avadh Sugar, Bajaj Hindusthan, and EID Parry saw declines of 2-4%. The sugar industry had hoped for approvals to use sugar syrup for ethanol production, an upward revision of the minimum support price (MSP), and the lifting of export restrictions. Despite the current market prices being above the MSP, a formal increase would bolster investor confidence. Elara Securities remains neutral on the sector in the short term but positive in the medium to long term due to the ongoing Ethanol Blending Program (EBP).

In conclusion, The Indian stock market’s reaction to the Union Budget was mixed, with notable movements in specific sectors and stocks. While some companies benefited from budgetary allocations and policy announcements, others faced challenges due to unmet expectations. Investors will continue to monitor these developments closely as the financial year progresses.