How Budget 2024 Affects the Indian Stock Market?

The Gist

The Union Budget of 2024-25 read out on 23rd July has created a mixed emotion in people It has created a lasting impact on investors and stock market enthusiasts

Increase in Securities Transaction Tax (STT)

Objective: Regulate high-frequency trading and speculative activities

New Rates: STT on options rises to 0.1%, futures to 0.02%

Impact: Higher trading costs for investors

Effect on Derivative Trading

Increased Costs: Higher STT could reduce derivative trading volumes

Retail Participation: Expected decrease in high-risk trading

Strategy Shift: Move from frequent trades to strategic investments

Market Impact

Trading Volumes: Potential decline in derivative volumes

Market Liquidity: Possible changes in market liquidity due to reduced trading

Long-term Effects: Focus on more stable investment options

Opportunities for Long-term Investments

Shift in Focus: Higher taxes may push investors towards long-term investments

Stable Growth: Emphasis on sustainable and less speculative strategies

Portfolio Adjustment: Rebalance to align with new market conditions

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