PRE-MARKET INDIAN STOCKS NEWS: Indian benchmarks were pressured in a rare-budget session on Sunday following the announcement to raise the Securities Transaction Tax on futures and options trading

The Indian government's decision to raise the Securities Transaction Tax on futures and options trading may weigh on investor sentiment, as such regulatory changes can deter trading activity and liquidity in the markets.

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PRE-MARKET INDIAN STOCKS NEWS: Indian benchmarks were pressured in a rare-budget session on Sunday following the announcement to raise the Securities Transaction Tax on futures and options trading

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India Budget

India increased infrastructure spending in its annual budget with the capital spending target for the upcoming fiscal year lifted by around 9% to INR 12.2tln, while it proposed to boost manufacturing in strategic sectors including rare earths and semiconductors, as well as proposed a tax holiday up to 2047 for foreign cloud companies making data centre investments in India. Furthermore, it strongly emphasised fiscal restraint and targeted reducing the debt-to-GDP ratio to 50% (+/-1%) from 56% by 2030/2031 and estimates the fiscal deficit will decline to 4.3% from 4.4% of GDP, while it is to raise the Securities Transaction Tax on futures and options trading. (Newswires)

Context

However, the overall budget focus on infrastructure spending and support for strategic sectors like semiconductors indicates a longer-term commitment to economic growth, which could balance out immediate bearish reactions. Traders should watch for market adjustments as participants digest the implications of these fiscal policies and their potential impact on equity valuations.

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