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The stock market initially dropped due to higher capital gains taxes but rebounded. Key corporate earnings rely on capex and consumption, bolstered by budget allowances and deductions. Retail participation and DII buying sustain high valuations.

Indian equity benchmarks saw minor declines: Nifty dropped 0.12%, Sensex 0.09%. Investor caution persisted over high valuations and new capital gains tax. Nikhil Ranka predicted consolidation between 23,700 and 24,500, while Chirag Mehta foresaw potential corrections. Mid-cap and small-cap stocks weakened; 2,223 BSE stocks fell. Quantum Mutual Fund noted capex disappointment and lack of demand-boosting measures.

The budget focuses on key areas like agriculture, employment, and infrastructure, with efforts to simplify taxation. Market valuations are high, calling for a cautious investment approach. Diversified asset allocation is recommended for balanced risk and return.

The recent budget emphasizes spending in the farm and rural economy, reduces income tax for middle-income households, and promotes employment and fiscal consolidation. Although higher capital gains tax and unchanged capex could disappoint, it includes social welfare schemes, a lower fiscal deficit, market borrowing, and beneficial impacts on bond yields, consumer durables, two-wheeler, QSR, pharmaceuticals, and telecommunications sectors.

Capital will go to places where it can thrive and multiply, so where business models are strong, where the enterprises are competitive, where value is getting created, I think capital will certainly flow there. So, I do not really think it is much of an issue.

​If you add 15,000 crores that has been given to Andhra plus another 26,000 crores that has been allocated to Bihar, which are also in turn for infrastructure projects. There is ultra mega power plant in AP. There are irrigation facilities to be set up in AP and there is allocation for roads for Bihar and therefore in many senses while it may seem that, oh, this is for two states, but if you add 15 and 26 that is another capex allocation that has happened.

​The challenge to the markets has got nothing to do with the budget. The challenge to the market is that there is very elevated investor sentiment and valuations are not cheap across the board.

​The nine chapters that she has mentioned, I know for some reason that serious work has been done about each of them and some places they have said, yes, this is under review, like income tax act or GST, etc, and so there is a whole big plan which was being hatched in the previous government and that is continued here.

Asian equities fall as tech giants post underwhelming earnings. Taipei stock market closes due to typhoon. Concerns over US election impact on market. Investors cautious amid economic troubles and geopolitical risks in China and Japan. Big Tech faces tough comparisons with previous stellar earnings cycles.

Equity markets react to capital gains tax hike but recover losses. Focus on L&T, Axis Bank, HUL, Bajaj Finance, Tata Consumer for news developments and earnings. Companies like Bajaj Finance and ICICI Pru Life report positive profit growth. South Indian Bank plans fund raising, while Torrent Pharma and Tata Consumer announce financial results.