India budget 2024: Stocks volatile, currency crashes
Illustration of the BSE building in Mumbai.
Indian stocks were volatile, and the rupee fell to a new record low against a burgeoning dollar, as finance minister Nirmala Sitharaman unveiled the budget 2024-25. Benchmark indices had surged to multiple record highs in the run-up to the budget.
Traders had positioned for broader reforms in taxes. However, stocks and rupee tanked on Tuesday after budget announcements, which included an increase in capital gains tax and new levy on derivatives trading.
The rupee fell to 83.69 against the dollar, inching past the previous lifetime low of 83.6775 and compared with 83.6275 before the budget announcement. The currency has been weighed lower by a stronger dollar in a broad emerging market hit. While the Reserve Bank of India has intervened in markets to stem significant moves in the rupee, the currency has tested several record lows over the past month.
The US federal reserve's decision to delay the start of its rate cut cycle has hurt global currencies, with emerging markets taking a bigger hit.
The blue-chip Sensex index fell as much as 1,500 points at one point. The index was last trading below the 80,000 level for the first time since June 12th, down about 600 points. The broader nifty index also crashed after starting the day with gains. It came within a whisker of falling below the 24,00 points mark and was last down by over 0.7 per cent. Investors have broadly given a thumbs down to the budget.