Sensex drops 500 points. Why is the Indian stock market sulking despite FM’s income tax bonanza in Budget 2025? | Stock Market News
The Indian stock market declined in intraday trade on Saturday, February 1, despite an income tax relief package that slightly exceeded Street expectations, as announced by Finance Minister Nirmala Sitharaman in her Budget 2025 speech. Finance Minister (FM) raised the exemption limit of income tax, announced a change in tax slabs, which she said will leave more money in the hands of middle-class consumers, boosting household consumption, savings, and investment.
There was a widespread expectation before the Budget that the FM would offer relief to middle-class consumers by increasing the tax exemption limit to ₹10 lakh and tweaking tax rates for different slabs. Sitharaman announced that there will be no income tax up to an income of ₹12 lakhs.
Several FMCG, consumer durables and auto stocks jumped after this announcement, but the broader indices of the market remained subdued.
The Sensex fell nearly 500 points to the level of 77,006.47, while the Nifty 50 declined over half a per cent to the level of 23,346 during the session, looking set to end the winning streak of the last four consecutive sessions.
The selloff was even deeper in the mid and small-cap segments as the BSE Midcap and Smallcap indices declined up to a per cent.
