HomeBlogBudgetBudget 2025 Impact: Important Stocks & Sectors to Watch Out

Budget 2025 Impact: Important Stocks & Sectors to Watch Out

Palka A Chopra
3 Feb 2025

Tags:

Budget
Important Stocks & Sectors
3 min read
volumeListen audio

The stock market reflected investor sentiment towards the government's financial priorities and sector-specific allocations, in response to the Union Budget 2025-26, presented by our Finance Minister, Nirmala Sitharaman, triggering a mixed reaction.

Market Overview -

The Indian stock market was highly volatile on the day of the budget announcement. The BSE Sensex jumped more than 300 points after tax relief measures were introduced but later dropped around 130 points. Similarly, the Nifty 50 also moved up and down, reflecting the market’s mixed reaction to the budget.

Key Budgetary Provisions and Their Market Implications -

1. Personal Income Tax Reforms - 

The budget raised the income tax exemption limit to ₹12 lakh, giving the middle class more disposable income, which is likely to boost spending. Sectors expected to benefit from this increased demand include, consumer durables, automobiles, jewellery and e-commerce.

2. Capital Expenditure (Capex) Allocation -

The budget has projected a capital expenditure of ₹11.2 trillion for the fiscal year 2025-26. However, some analysts worry that the increase is too small and could negatively affect the railway, defense and infrastructure sectors. 

3. Sectoral Impacts- 

Demand for two-wheelers and passenger vehicles is expected to rise due to tax relief for the middle class. Higher purchasing power is likely to boost the fast-moving consumer goods (FMCG) sector, driving demand for products. 

The unchanged capital expenditure allocation may lessen expectations for the infrastructure and industrial sectors, as government investment remains limited. Insurance Policy companies, faced losses due to reduced tax incentives for savings-oriented products.

Investor Sentiment-

Investors have responded cautiously to the budget's focus on boosting consumption rather than increasing major infrastructure spending. While sectors linked to consumer spending are expected to gain, the lack of significant capital expenditure growth has raised concerns about long-term economic expansion. 

Conclusion-

The Union Budget 2025 presents a balanced economic policy, combining tax relief to encourage spending with a cautious approach to capital expenditure. As the market digests these measures, investors should monitor sector-specific developments and adjust their strategies accordingly, keeping in mind both the short-term and long-term impacts of the budget.

Palka A Chopra
3 Feb 2025

Related blogs

How the Stock Market Works in India
How the Stock Market Works in India
30 Jan 20247 min read
Market recap
How the Stock Market Works in India: A Guide | mastertrust

Have you ever wondered about the complexities of the stock market in India? If so, you're not alone. In this exten...

Role of Inflation
Role of Inflation
15 Jan 20247 min read
Budget
Role of Inflation in Long-Term Investment Planning

In Financial Planning, one of the things that plays a key role is the impact of inflation on your investments.

FERA vs. FEMA
FERA vs. FEMA
14 Dec 20234 min read
Investing
Understanding FERA vs. FEMA: Key Differences Explained | mastertrust

In the world of financial services and international trade, regulations play a crucial role in governing transaction

Understanding Negative Rate Bonds
Understanding Negative Rate Bonds
27 Oct 20235 min read
Investing
Understanding Negative Rate Bonds: Investor Strategies | mastertrust

Bonds are considered a popular investment avenue by Investors. The demand for negative yield bonds is on the rise

Sign up to our newsletter !
Share this article on
copy

Recent articles

1 of 4
What is SME IPOs: Meaning, Differences and How to Apply

Small and medium-sized businesses, also known as SMEs, are crucial for socioeconomic growth in many developing cou...

Tags:

Budget
Demat
Investing
Market recap
Featured

Open a Demat Account in just 15 minutes !

Commonly asked questions

Is Master Capital Services Limited SEBI registered?

about accordion arrow

Do you have a mobile app for Trading and Finance Management?

What services does mastertrust provide?

What is the minimum investment required to start trading with your company?

Is my personal and financial information secure with your company?

What is your customer support availability?

Open an account