<p>The fuzzy feeling from the federal budget is expected to wear off as traders face a global market selloff triggered by Trump‘s tariff decisions. Nifty futures indicate a sharp cut for indexes, with sectors tied to the global economy being the most vulnerable. Consumption stocks may help cushion the volatility, driven by the government’s tax cuts and their defensive nature.</p>.<p>Investor sentiment toward consumer staples has improved after Saturday’s budget delivered a 1 trillion rupees tax relief for the middle class. Even before the announcement, some analysts were of the view that it may be time to start nibbling at these stocks. Nuvama Wealth Management sees limited downside, noting that valuations are reasonable and earnings are set to improve as demand starts picking up in the coming quarters.</p>.<p>Insurers’ shares tumbled on Saturday as the initial excitement over the increased foreign direct investment limit in the sector faded, replaced by concerns over a regulatory tweak. The new definition of equity-linked products subjects unit-linked investment plans or ULIPs — a high-margin offering — to long-term capital gains tax, making them less attractive. However, the downside may be limited as these stocks have low retail ownership and budget expectations were already low, leaving little speculative buildup to unwind.</p>.<p>The long-awaited tax relief for the middle class comes at an opportune time, as consumers have been struggling with stagnant wages and rising prices. However, this move could also have “subtle behavioral implications,” says mutual fund data aggregator Value Research. The main implication would be a shift away from tax-friendly saving products, which have historically motivated young professionals to start investing. Over time, this change in mindset could hit insurance companies and asset managers as the new rule kicks in. </p>.<p>India’s booming equity market is giving the government every reason to be happy about it. The tax collected from buying and selling stocks and trading derivatives just keeps growing, despite grumblings from market participants about paying this on top of capital gains tax. With a base of more than 100 million unique investors and rising trading volumes, the government expects a 40 per cent higher mop-up from this levy for the fiscal year starting April 1.</p>
<p>The fuzzy feeling from the federal budget is expected to wear off as traders face a global market selloff triggered by Trump‘s tariff decisions. Nifty futures indicate a sharp cut for indexes, with sectors tied to the global economy being the most vulnerable. Consumption stocks may help cushion the volatility, driven by the government’s tax cuts and their defensive nature.</p>.<p>Investor sentiment toward consumer staples has improved after Saturday’s budget delivered a 1 trillion rupees tax relief for the middle class. Even before the announcement, some analysts were of the view that it may be time to start nibbling at these stocks. Nuvama Wealth Management sees limited downside, noting that valuations are reasonable and earnings are set to improve as demand starts picking up in the coming quarters.</p>.<p>Insurers’ shares tumbled on Saturday as the initial excitement over the increased foreign direct investment limit in the sector faded, replaced by concerns over a regulatory tweak. The new definition of equity-linked products subjects unit-linked investment plans or ULIPs — a high-margin offering — to long-term capital gains tax, making them less attractive. However, the downside may be limited as these stocks have low retail ownership and budget expectations were already low, leaving little speculative buildup to unwind.</p>.<p>The long-awaited tax relief for the middle class comes at an opportune time, as consumers have been struggling with stagnant wages and rising prices. However, this move could also have “subtle behavioral implications,” says mutual fund data aggregator Value Research. The main implication would be a shift away from tax-friendly saving products, which have historically motivated young professionals to start investing. Over time, this change in mindset could hit insurance companies and asset managers as the new rule kicks in. </p>.<p>India’s booming equity market is giving the government every reason to be happy about it. The tax collected from buying and selling stocks and trading derivatives just keeps growing, despite grumblings from market participants about paying this on top of capital gains tax. With a base of more than 100 million unique investors and rising trading volumes, the government expects a 40 per cent higher mop-up from this levy for the fiscal year starting April 1.</p>