Mumbai, Feb 8 (IANS) The stock market saw two major policy moves this week that could significantly impact India’s economic trajectory — the Union Budget 2025, which introduced tax cuts to boost consumption and investment, and the RBI’s 25 bps rate cut, signalling a shift towards monetary easing, experts said on Saturday.
These measures collectively aim to strengthen economic growth while maintaining fiscal discipline. On the markets front, Nifty 50 is up 1 per cent, Nifty Midcap is up 0.9 per cent and Smallcap index is up 0.7 per cent.
The Indian stock market closed lower on Friday as investors continued to assess the RBI’s Monetary Policy Committee (MPC) decision to cut the repo rate by 25 basis points (bps).
However, the central bank maintained its policy stance, keeping a neutral approach. The Monetary Policy Committee (MPC) decided to reduce the repo rate from 6.5 per cent to 6.25 per cent.
The Sensex eventually settled at 77,860, down by 198 points. The Nifty index fluctuated between 23,694 and 23,443, before closing at 23,560 with a decline of 43 points.
According to Krishna Appala of Capitalmind Research, the Budget provided long-awaited tax relief, putting more money in the hands of consumers.
Individuals earning over Rs 24 lakh annually will now save an additional Rs 1.1 lakh per year, while those earning up to Rs 12 lakh per year will effectively pay no income tax.
“With an estimated Rs 1 lakh crore expected to flow back into the economy through these tax cuts, the move is likely to encourage higher discretionary spending and savings,” said Appala.
Despite these tax reductions, the government has kept its fiscal consolidation efforts intact, setting the FY26 fiscal deficit target at 5.3 per cent of GDP, down from 5.8 per cent in FY25.
Alongside the fiscal push, the RBI’s decision to cut the repo rate by 25 bps to 6.25 per cent marks the beginning of a potential rate-cut cycle after over two years of unchanged policy rates.
This follows a 50 bps CRR cut in December 2024 and a Rs 60,000 crore bond purchase programme, all aimed at improving liquidity in the banking system.
Hrishikesh Yedve of Asit C Mehta Investment Interrmediates Ltd (a Pantomath Group company) said that on the weekly scale, index has formed a green candle, confirming the bullish engulfing pattern formed last week.
“On the downside, immediate support for the Bank Nifty is near 49,650, while on the upside, 50,600 will function as resistance. Traders should closely monitor these levels for potential opportunities. However, looking at weekly formation, buy on dips strategy should be adopted in Bank Nifty,” he mentioned.
—IANS
na/
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by TodayIndia.news and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of TodayIndia.news We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, TodayIndia.news takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
