Sat Feb 01 17:52:08 UTC 2025: ## Indian Stock Market Shows Mixed Reaction to Budget 2025

**Mumbai, February 1, 2025** – The Indian stock market experienced significant volatility today following the presentation of the Union Budget 2025-2026 by Finance Minister Nirmala Sitharaman. While benchmark indices Sensex and Nifty 50 ended the day with only marginal changes, the session saw considerable fluctuations. The Sensex closed up 0.01% at 77,505.96, while the Nifty 50 dipped 0.11% to 23,482.15.

The budget, which included substantial income tax cuts for the middle class and a focus on fiscal consolidation, sparked mixed reactions across sectors. FMCG, realty, media, and auto sectors saw the strongest gains, while PSU banks, metals, pharmaceuticals, and oil & gas experienced losses. The broader markets showed a mixed performance, with the Nifty Smallcap 100 index gaining 0.41% and the Nifty Midcap 100 index losing 0.42%. The Bank Nifty index also fell by 0.16%.

Several analysts offered perspectives on the budget’s impact. Navneet Munot of HDFC Asset Management praised the government’s focus on consumption and investment, predicting that the tax simplification measures would boost investor confidence. Others highlighted the budget’s positive effect on consumption-driven stocks and financials, while noting potential negative impacts on the banking sector due to increased government borrowing. The budget’s target of a 4.4% fiscal deficit for FY26, down from a revised 4.8% for FY25, was also noted as a positive sign.

Individual stock performance varied widely. Top gainers on the Nifty 50 included Trent, ITC Hotels, and Maruti Suzuki India, while Bharat Electronics, PowerGrid Corporation of India, and Larsen & Toubro were among the biggest losers. Defense stocks experienced a significant downturn, with some losing up to 8%, despite a ₹4,91,732 crore allocation to the sector. Conversely, several sectors including FMCG, automobiles, and footwear showed strong gains following specific budget announcements.

The government’s measures to boost domestic manufacturing and the expansion of the Kisan Credit Card scheme were also highlighted as potentially positive developments. The introduction of a second tranche of the SWAMIH fund to support stressed residential projects was also noted.

The market’s long-term reaction to the budget remains to be seen, with analysts emphasizing that growth and earnings will ultimately dictate the medium-to-long-term direction.

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