Sat Feb 01 23:22:09 IST 2025: ## Union Budget 2025 Sends Shockwaves Through Indian Markets

**Mumbai, February 1, 2025** – The Union Budget 2025, presented today by Finance Minister Nirmala Sitharaman, has triggered significant volatility in the Indian stock market. While consumption-oriented stocks surged on the back of tax relief measures, capital expenditure (CAPEX) plays experienced a sharp decline, leading to a mixed market response.

The Sensex gained a modest 5 points to close at 77,506, while the Nifty fell 26 points to 23,482. Midcap stocks fared worse, with the index dropping 226 points to 53,486, and the Nifty Bank index falling 80 points to 49,507. However, the Nifty FMCG and Tourism indices were notable gainers, rising on the strength of the consumption boost. Conversely, Defence, PSU, and capital goods indices were among the biggest losers, each falling over 3%.

A key driver of the market’s reaction was the government’s decision to increase the income tax threshold under the new regime to ₹12.75 lakh (including standard deductions). This measure spurred a significant rise in shares of consumption-related companies. Zomato and Swiggy, both up 10%, and Trent Ltd. (up over 8%), were among the biggest beneficiaries. The Nifty FMCG index saw its biggest single-day gain since June 2024, climbing 4%. Radico Khaitan and D-Mart also saw substantial gains.

However, the lower-than-expected FY26 CAPEX (₹11.2 lakh crore) disappointed investors, leading to significant losses for companies like L&T, BEL, Power Grid, and JSW Energy. The unchanged rail CAPEX also negatively impacted railway stocks, with IRFC, IRCON, and RVNL falling as much as 10%. Oil Marketing Companies (OMCs) fell 3-4% due to the announcement on LPG subsidies.

The auto sector showed mixed results. While Maruti Suzuki saw a gain of over 6% on strong January sales data (total sales up 6.5% YoY), Eicher Motors saw a 20.1% increase in VECV sales, yet the overall sector performance was less dramatic.

Positive announcements regarding tourism development, including extending Mudra loans to homestays, boosted shares of Easy Trip Planners Ltd. The government also announced a new Maritime Development Fund with a corpus of ₹25,000 crore. The overall market breadth was neutral, with an advance-decline ratio of 1:1.

Despite the mixed results, the Finance Minister highlighted positive developments in iron ore production (up 12.3% YoY) and vehicle sales (2-wheelers up 18%, electric vehicles up 55%, exports up 46%). The government maintained its disinvestment target for FY26 at ₹47,000 crore. For further updates, visit CNBCTV18.com or follow @CNBCTV18Live and @CNBCTV18News on Twitter.

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