Markets Flat as Budget Session Opens; Focus on Tariff Relief & Capex

The Nifty 50 index opened at 25,333.75, registering a marginal gain of 13.10 points or 0.05 per cent, while the BSE Sensex opened at 82,445.97, up by 176.19 points or 0.21 per cent.

This marks only the second time in the history of Indian stock markets that trading is taking place on a weekend for a special budget session. Earlier, markets were opened on a weekend in 1999, when the Union Budget was presented on February 27, a Saturday.

Market expert Ajay Bagga said expectations from the Budget remain subdued. Speaking to ANI, Bagga said, "We are going into the Union Budget with lowered expectations given the personal income tax cuts, corporate tax cuts, consumption tax cuts in the form of GST cuts have all been done earlier."

He added that expectations are centred around higher capital expenditure in defence and railways, a lower fiscal deficit, and a clear glide path towards reducing the Debt-to-GDP ratio by 2031.

"Overall rise in capex, targeted schemes to bolster AI and semiconductor plays and manufacturing, relief for tariff impacted exporters like textiles and intermediate goods, credible reduction in fiscal deficit and public debt levels along with the vision for the next quarter of growth towards a Viksit Bharat are the key expectations," Bagga noted.

In the broader markets on the National Stock Exchange, the Nifty 100 slipped 0.03 per cent, the Nifty Midcap 100 opened marginally in the green, while the Nifty Smallcap 100 remained under pressure.

Among sectoral indices, Nifty Metal declined sharply by 3.37 per cent. Nifty IT, Media, PSU Bank, Oil & Gas and Financial Services traded weak, while Auto, FMCG, Pharma, Realty and Healthcare indices were in the green.

Metal stocks saw heavy selling pressure, with Vedanta shares plunging 17 per cent to Rs 629, while Hindustan Zinc fell over 20 per cent to Rs 566. The decline followed sharp selling in gold and silver.

Bagga warned that despite Gift Nifty ending positive on Friday, the steep fall in metals could trigger liquidity-driven selling in Indian equities due to leveraged positions and margin calls. He added that the impact of the Union Budget has remained muted on Budget day for the last three years, and stressed the need for cuts in STT, LTCG and STCG to boost market sentiment.

In the commodity market, gold witnessed sharp volatility, falling around 5.4 per cent on Saturday to Rs 1,69,470 per 10 grams for 24 karat gold. In international markets, gold prices declined by over 9 per cent to USD 4,887 per ounce.

Bagga said, "The Gold and Silver trades are not over if you have staying power and avoid leverage... If you have the capacity to hold, keep your 10-15 per cent portfolio allocation to Gold and Silver intact."

Other Asian markets remained closed on Sunday, with Indian stock markets being the only ones open due to the special budget trading session.

- ANI