Markets sulk on capex blues, consumption stocks gain

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Subscribe to enjoy similar stories. The stock market closed largely unchanged as the Union budget disappointed on the capex front, even though the tax cuts proposed are expected to give a boost to consumption. Foreign portfolio investors (FPIs) gave a thumbs-down to the budget at Saturday's special session, selling a provisional ₹1327.09 crore worth of shares, even as domestic institutional investors net purchased equities worth ₹824.38 crore.

The Nifty ended down 0.11% at 23482.15 while the Sensex ended up a mere 0.01% higher at 77505.96. The correction in markets, driven by FPIs selling ₹2.37 trillion worth since October, is expected to continue with small and mid-cap stocks underperforming large-caps, market veterans said. "Amid a slowdown in economic growth, slow private capex and a depreciating rupee, the market was expecting government heavy-lifting to give the desired boost, which probably didn't materialize the way it had hoped for, resulting in the sluggish response," said Swarup Mohanty, CEO & vice-chairman of Mirae Asset Mutual Fund.

"To be sure, the boost via the ₹1 trillion forgone by the personal income tax breaks would aid consumption and savings of middle and lower income groups, but the Street was hoping for sizeable allocations on railways or roads, the absence of which led to the disappointment," he added. The government revised the capex for FY25 to ₹10.18 trillion from the budgeted ₹11.1 trillion. The estimated ₹11.2 trillion for FY26 didn't excite the Street, amid doubts on whether the target for the forthcoming year would be met.