Best Stocks to Buy :In the first budget of Modi 3.0, the Finance Minister took an unexpected step and increased the tax on long term capital gains and short term capital gains for equity to 12.5 percent and 20 percent. Earlier, long term capital gains were 10 percent, while short term capital gains were 15 percent. However, the limit under long term capital gains has been increased from Rs 1 lakh to Rs 1.25 lakh.
At the same time, STT has been increased for the F&O segment. While important changes have been made in taxation for other asset classes as well. The effect of the increase in capital gains tax is also visible on the stock market. Today the market has seen a decline for the second consecutive day. Earlier, the market had weakened on Budget Day as well. The question arises that in which stocks should investors invest their money after the budget.
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No solution to boost consumption
Brokerage house Motilal Oswal says that the market was expecting that some steps would be taken to boost consumption. But the budget disappointed in this regard. However, the focus was on increasing employment through skill development and the new tax regime will increase slightly more income in the hands of the salaried class through adjustments in tax slabs and higher limits for standard deduction. This may indirectly benefit consumption demand marginally.
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These factors will strengthen market sentiment
With markets at new highs, the budget further reinforces India’s strong macromicro position amid a fragile global economy. A combination of 7 per cent GDP growth and 15 per cent Nifty earnings CAGR over FY24-26, stable currency, moderate inflation and rising retail participation in the market could keep sentiments strong. However, valuations look reasonable for the Nifty50 and expensive for mid/small caps. The midcap index is now trading at a P/E of 33x, a 60 per cent premium to the Nifty.
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Which sectors will benefit
According to brokerage house Motilal Oswal, industrial and capex, consumer, real estate, PSU bank sectors may see further growth. The brokerage has given overweight rating to PSU bank, consumption, industrial and real estate sectors. The rating on the IT sector has been increased from underweight to marginal overweight, while the rating on auto has been reduced from overweight to underweight. At the same time, the rating on healthcare has been changed from neutral to overweight, while the underweight rating has been maintained on private bank and energy sectors.
Top Largecap Stock Ideas
ICICI Bank
SBI
L&T
M&M
HCL Technologies
Coal India
Titan
Mankind Pharma
Hindustan Unilever
Hindalco
Top Midcap and Smallcap Stock Ideas
Indian Hotels
Ashok Leyland
Godrej Prop
KEI Ind
PNB Housing
Cello World
Kalyan Jewellers
Persistent Systems
Angel One
Metro Brands
(Disclaimer: Investing or selling stocks is advised by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
