Indian stock exchanges slumped majorly after re-opening on Monday, 8th July following their weekend close, on the back of finance minister Nirmala Sitharaman announcing the country's budget on 5th July. The National Stock Exchange (NSE) fell by around 2.1 per cent and ended the day at around 11,558.
The Bombay Stock Exchange (BSE) fell by about 2.01 per cent to end the day at around 38,720. This was the lowest end-of-day closure for both stock exchanges in about a month-and-a-half. Sitharaman, the finance minister, in her budget had increased the proportion of the general public's stake in publicly-listed shareholding to 35 per cent from the existing 25 per cent.
This led to worry that new shares would need to be issued in order to fulfil this stipulation. Another highlight of the budget is that levies on imports have also been increased, including a 5 per cent imposition of duties on imported books into the country.
Lastly, the tax-slabs have also been altered with the super-rich category facing a stiff tax levy. Sanctum Wealth Management's Chief Investment Officer (CIO), Sunil Sharma spoke to Reuters regarding the sentiments expressed by the stock markets.
Sharma said, "The investor community is disappointed with the budget and there will likely be short-term money exiting the market. Markets are voicing their disappointment in the lack of anything in the budget for the consumer."
Earlier, in May, following the 2019 general election results and Narendra Modi's winning of the same, the Indian markets had rallied euphorically.