Modi stocks out, consumer stocks in. How Nirmala Sitharaman changed investing theme in Budget
Nirmala Sitharaman has just changed the prescription for economic growth to rely more on boosting consumption in a slowing economy rather than firing the capex engine with another double-digit hike. The impact of the shift was clearly visible on the stock market where beaten-down stocks from the consumption space suddenly became investor favourite while the good-old capex stocks were left reeling in losses.
As against a flat Nifty, the FMCG index jumped 3% on Saturday, with stocks like Radico Khaitan, Godrej Consumer, United Spirits rallying up 10%. Supporting Sensex and Nifty were consumer-related stocks like ITC, Zomato, Trent, Tata Consumer and Asian Paints. On the other hand, capex-linked stocks like L&T, Siemens, etc were among the biggest losers on the Street.
While announcing major tax relief for the middle class with a total tax exemption for income up to Rs 12 lakh per annum in the Budget, Sitharaman disappointed on the capex front by increasing the capex to just Rs 11.2 lakh crore in FY26 from Rs 11.11 lakh crore in FY25.
The revised budget estimates for FY25 show an even lower capex spend in FY25 at Rs 10.18 lakh crore.
Also read | RVNL, Ircon, other rail stocks crash up to 9%. Here's what went wrong in Budget
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