The budget highlights fiscal prudence, skilling, social sectors, and domestic manufacturing, with higher Capital Gains Taxes and tax simplification effective April 2025. Amid an overvalued equity market, cautious investing is recommended. Private sector banks remain attractive, balancing increased IPO and rights issue issuance. While economic growth hasn't fully boosted employment, investment flows stay robust.
India's fiscal strategy aims to reduce debt-to-GDP by 2026-27. Budget increases capital gains tax amid SEBI's market exuberance warning; property sales tax raised to 12.5%, with decreased holding periods benefiting homebuyers. Strong external balances and forex reserves cut gold import duty to 6%.
Mukesh Aghi asserts Kamala Harris’s nomination won’t change India-US relations. Democrats raised USD100 million; Harris appeals to women and African American voters. Strategic ties counter China and critical minerals dependency. Her balanced approach during Modi's visit ensures policy continuity, enhanced cooperation, and Indo-Pacific influence, says USISPF influenced by her summers in India.
The budget focuses on key areas like agriculture, employment, and infrastructure, with efforts to simplify taxation. Market valuations are high, calling for a cautious investment approach. Diversified asset allocation is recommended for balanced risk and return.
The budget presents a mixed bag for capital markets and entrepreneurship. Speculative trading faces increased taxes on futures and options, while startups receive support with lower capital gains and removal of 'angel tax'. A delicate balance is maintained between market stability and startup growth.
Indian equity benchmarks saw minor declines: Nifty dropped 0.12%, Sensex 0.09%. Investor caution persisted over high valuations and new capital gains tax. Nikhil Ranka predicted consolidation between 23,700 and 24,500, while Chirag Mehta foresaw potential corrections. Mid-cap and small-cap stocks weakened; 2,223 BSE stocks fell. Quantum Mutual Fund noted capex disappointment and lack of demand-boosting measures.
The stock market initially dropped due to higher capital gains taxes but rebounded. Key corporate earnings rely on capex and consumption, bolstered by budget allowances and deductions. Retail participation and DII buying sustain high valuations.
The new budget shifts share buyback taxes to investors, impacting promoters, large shareholders, and exit strategies, particularly in family settlements. Tax rates on accumulated funds often exceed 23%, according to Ketan Dalal. Prime Database noted 48 firms, including tech companies, spent ₹48,079 crore on buybacks in 2023. The buyback tax started in 2013 for unlisted, extended to listed in 2019.
GAIN DRAIN Tax on long-term capital gains raised from 10% to 12.5%, while short-term capital gains up from 15% to 20%
"Aleksander is working on a new and v(very) important research project," Altman said in a post on X, adding that OpenAI executives Joaquin Quinonero Candela and Lilian Weng will be taking over the preparedness team in the meanwhile.
The government has proposed a 60% increase in STT on equity derivatives, affecting trading costs for high-frequency traders. Sebi may implement stricter measures to regulate the market. Retail traders may not be significantly impacted by the changes.
Alphabet saw Q2 growth in digital ads, cloud services, and AI, with $84.74 billion revenue and $23.6 billion net income. Capex is forecasted at $12 billion. AI rollout issues; deals with Wiz and HubSpot fell through. A $5 billion investment into Waymo. Google reversed its decision on third-party cookies amid regulatory scrutiny, stated Sundar Pichai.
Wall Street's main indexes closed slightly lower as investors turned attention to earnings reports from Alphabet and Tesla. Both companies reported positive revenue numbers for the second quarter. Market awaits tech giants' earnings to gauge market valuation. Small-cap stocks showed a 1% increase, while megacaps initially lifted markets before overall declines.
U.S. ether ETFs debuted with $1.07B traded. Leading volumes: Grayscale ($450M), iShares ($245M), Fidelity ($137M). Enhancing market legitimacy, potentially reducing volatility. Ether prices dipped. Fees: 0.19% to 2.5%. SEC Chair Gensler cited Grayscale's influence. Projections: $1B monthly inflows. Staking excluded.
Commodity currencies weaken, yen strengthens ahead of central bank meeting. European PMI data closely watched for rate cut expectations. Market reactions to Chinese demand, surprise rate cuts, and global economic indicators drive currency fluctuations. Traders prepare for potential shifts in major currency pairs.
U.S. crude inventories fell for four weeks ending July 19, pushing Brent to $81.47 and WTI to $77.38. API confirmed declines; official data pending. Prices previously hit a six-week low due to Israel-Hamas ceasefire talks. Economic concerns in China also persist, marking the first four-week crude decrease since September 2023.
The Union budget praised by USISPF abolishes the angel tax and sets a 35% foreign tax rate, boosting global investment. Duty cuts enhance local manufacturing and supply chain efficiency. The budget prioritizes healthcare with cancer drug exemptions, supports innovation, reforms digital taxation and transfer pricing, and promotes ESG financing, safe harbors, and cross-border transactions.
US-India Strategic Partnership Forum CEO praises India's Union Budget 2024 for its balanced approach towards job creation and deficit reduction. Finance Minister presents record seventh consecutive budget, outlining priorities for economic growth and skilling initiatives.
Happy Wednesday! Finance minister Nirmala Sitharaman abolished the decade-old angel tax bringing widespread cheer in the overall startup economy. This and more in today’s ETtech Morning Dispatch.
Vice President Kamala Harris is narrowly beating rival Donald Trump in a national presidential poll released Tuesday, one of the first conducted since US President Joe Biden ended his reelection campaign. It was conducted in the two days after Biden announced Sunday he was dropping out of the race and endorsing his vice president.
Markets initially slumped but recovered on Budget day. Gift Nifty fell 60 points. Rajesh Bhosale observes an overbought market. India VIX dropped 17.43%. GNFC, India Cements, SAIL are in F&O ban. Rupee hit record lows, FIIs were net sellers, DIIs net buyers. Crude prices rose, and global indices fluctuated. Bullish reversal pattern anticipated in Nifty.
Crooks used a rifle and rangefinder to shoot at Trump at the July 13 Butler rally, after officers left posts. Secret Service Director Cheatle, citing this "most significant operational failure", resigned. District Attorney Goldinger and investigations seek Crooks' motive. House Oversight, Homeland Security Committees, bipartisan task force investigate. One death, two injuries.
Nirmala Sitharaman's budget focuses on job creation, infrastructure, reducing deficit (4.9% GDP), defense (6.2 trillion rupees), youth reskilling, borrowings, pensions, capital budget, subsidies cuts, education, health, and food pledge. Central bank windfall supports funding. Goal: government debt decline by 2026-27 and making India a developed nation by 2047, under Modi's coalition.
Equity markets react to capital gains tax hike but recover losses. Focus on L&T, Axis Bank, HUL, Bajaj Finance, Tata Consumer for news developments and earnings. Companies like Bajaj Finance and ICICI Pru Life report positive profit growth. South Indian Bank plans fund raising, while Torrent Pharma and Tata Consumer announce financial results.
Asian equities fall as tech giants post underwhelming earnings. Taipei stock market closes due to typhoon. Concerns over US election impact on market. Investors cautious amid economic troubles and geopolitical risks in China and Japan. Big Tech faces tough comparisons with previous stellar earnings cycles.
