Markets React to Budget 2024-25: Volatile Trading Sessions Witness Minor Declines

Sensex and Nifty experienced marginal declines amid volatile trading, following the government's budget proposal to hike securities transaction tax on futures and options. Though the indices recovered from significant intraday losses, broader market indices witnessed mixed reactions. Analysts foresee short-term negative impacts due to increased taxes but recognize potential growth from infrastructure and rural spending.

Benchmark indices Sensex and Nifty saw slight declines after a turbulent trading session on Tuesday, as the government proposed higher securities transaction taxes on futures and options in the annual budget for 2024-25.

The BSE Sensex recovered most of its intra-day loss of over 1,200 points, closing 73.04 points down at 80,429.04. Finance Minister Nirmala Sitharaman's budget announcement, which included tax hikes, initially caused a significant plunge, but market reactions were tempered by tax exemptions and duty cuts benefiting consumer durables and FMCG shares.

Analysts expressed mixed reactions, anticipating short-term negative impacts from increased capital gains taxes while acknowledging potential growth from the government's infrastructure and rural development expenditures.