Budget 2017: BSE-Listed Companies' Market Value Hits Record High
New Delhi: Total market valuation of Bombay Stock Exchange or BSE-listed companies surged to an all-time high of over Rs 114 lakh crore on Wednesday on the back of robust stock market sentiment amid Union Budget 2017-18 proposals, especially with regard to fiscal discipline and clarity on foreign portfolio investor or FPI taxation.
The BSE market capitalisation or M-Cap swelled to Rs 1,14,27,774 crore on Wednesday.
"In the midst of grave global and domestic challenges, the Finance Minister has done a commendable job. Markets have rejoiced as the fears of extending long term capital gains tax tenure from 1 year to 2 years has not materialised," said Ajay Bodke, CEO and chief portfolio manager-PMS at Prabhudas Lilladher.
A focus on fiscal discipline and clarity on FPI taxation as reflected in the Union Budget came as music to investors' ears, with the Sensex leaping nearly 486 points on Wednesday to close at an over three-month high of 28,142.
Additionally, Finance Minister Arun Jaitley proposed that Category-I and -II foreign portfolio investors (FPIs) should be exempted from taxation on indirect transfers, which made investors a happy lot.
Among the 30 Sensex stocks, 18 ended with gains. Notable gainers were Maruti Suzuki India, M&M, ITC and ICICI Bank.
"For the markets, the fiscal deficit of 3.2 per cent is positive as it means interest rates can be lower further during the next fiscal. Also, absence of any changes in capital gains tax is a positive as these apprehensions have been erased. Focus on markets will now shift to the global factors and the remaining quarterly results," said Dipen Shah, senior vice president-PCG research at Kotak Securities.
The markets welcomed the budgetary proposals of infusing Rs 10,000 crore in public sector banks and keeping long-term (LTCG) and short-term capital gains tax (STCG) unchanged for the capital market.
"Markets had apprehensions about possible changes in the equity-related tax regime. But, there was nothing to be concerned about in the budget. This can sustain a rally in the equities which would continue to be the most tax efficient investment option at present in the country," said Suhas Harinarayanan, head -institutional equities research at JM Financial Institutional Securities.
On the BSE, 1,913 stocks advanced, while 915 declined and 104 remained unchanged.
