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Union Budget 2026: Why Budget announcements matter for stock market direction

With markets open on Budget day, Union Budget 2026 is set to influence stock movements as investors track growth measures, taxation changes and the fiscal deficit.

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The Union Budget remains one of the most closely watched events in India’s financial calendar, with stock markets often reacting sharply to policy signals. This year, trading will continue on Budget day — February 1 — despite it falling on a Sunday, allowing investors to respond immediately to announcements.

Finance Minister Nirmala Sitharaman will present her ninth consecutive Union Budget, an event that is expected to set the tone for market sentiment in the near term.

Growth-focused policies and investor sentiment

Equity markets generally respond positively when the Budget outlines steps aimed at supporting economic growth. Measures such as infrastructure spending, business-friendly reforms or incentives for key industries tend to improve investor confidence.

When such policies signal long-term expansion, markets often factor in stronger earnings prospects, leading to upward movement in stock prices.

Consumer spending and sectoral gains

Budget proposals that increase disposable income can also influence market behaviour. Tax relief measures, direct support schemes or efforts to manage inflation may leave households with more spending power.

Higher consumer spending typically benefits sectors such as retail, automobiles and fast-moving consumer goods, with increased demand often reflected in company valuations.

Tax changes and market participation

Tax-related announcements play a crucial role in shaping investment decisions. Lower taxes for individuals or businesses can support consumption and profitability, encouraging further investment activity.

At the same time, changes to capital gains or dividend taxation directly affect investor behaviour. Favourable tax treatment can lead to higher participation in equity markets, while tighter taxation may weigh on sentiment.

Fiscal deficit remains a key indicator

Markets also keep a close watch on the fiscal deficit — the difference between government spending and revenue. A higher deficit can raise concerns around increased borrowing, inflationary pressure and interest rates, all of which may affect corporate performance.

Conversely, a controlled deficit is often seen as a sign of fiscal discipline, helping strengthen confidence among investors.

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Rain, thunderstorms hit Delhi-NCR as IMD issues weather alert for next two days

Delhi, Noida, Gurugram and Ghaziabad are likely to witness rain, thunderstorms and gusty winds after IMD issued a weather alert for the region.

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Heavy rainfall in Delhi, storm

Rain, thunderstorms and gusty winds lashed parts of Delhi-NCR, bringing relief from the intense summer heat, while the India Meteorological Department (IMD) issued a yellow alert for the next two days. The weather department has forecast more showers, thunderstorms and strong winds across Delhi, Noida, Gurugram and Ghaziabad.

According to IMD, cloudy skies, light to moderate rainfall, thunderstorms and gusty winds may occur at several locations in Delhi-NCR. Wind speeds could reach 40-50 kmph and may gust up to 60 kmph during thunderstorm activity.

The weather department has advised residents to remain cautious during periods of strong winds and lightning. The expected rainfall is likely to keep temperatures lower than usual for early June, extending the relief from intense heat that the region witnessed in recent weeks.

Rain activity likely across NCR cities

The forecast indicates that Noida, Gurugram and Ghaziabad are also expected to receive spells of rain accompanied by thunderstorms over the coming days. Similar weather conditions have been predicted across much of the NCR region as atmospheric instability continues to influence northwestern India.

Recent spells of rain and dust storms have already brought down temperatures across Delhi-NCR, with weather officials predicting additional showers before conditions gradually improve later in the week.

Residents have been advised to monitor weather updates and avoid open areas during thunderstorms and lightning activity. Authorities also caution that strong winds may affect traffic movement and outdoor activities in some areas.

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Vijay allocates Tamil Nadu’s lone Rajya Sabha seat to Congress

Tamil Nadu Chief Minister Vijay has handed the state’s lone vacant Rajya Sabha seat to Congress, strengthening alliance ties ahead of the upcoming Upper House elections.

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Actor vijay

Tamil Nadu Chief Minister and TVK chief Vijay has allotted the state’s lone vacant Rajya Sabha seat to alliance partner Congress, a move that further strengthens cooperation between the two parties after the formation of the new government. The decision comes ahead of the Rajya Sabha elections scheduled for June 18.

The allocation is being seen as an important political gesture by Vijay towards Congress, which has emerged as a key ally of the ruling coalition in Tamil Nadu. Congress currently has five MLAs supporting the government and is also represented in the state cabinet.

Sources indicate that senior Congress leader and All India Congress Committee functionary Praveen Chakravarty is likely to be the party’s nominee for the Rajya Sabha seat. His nomination is expected to be filed in the coming days.

Move reinforces TVK-Congress partnership

The decision follows recent interactions between senior Congress leaders and the Tamil Nadu leadership, including a meeting between veteran Congress leader P. Chidambaram and Chief Minister Vijay. Political observers view the Rajya Sabha seat-sharing arrangement as another step towards consolidating the alliance ahead of future electoral contests.

Congress had reportedly sought the Rajya Sabha berth from its ally, and the allocation is expected to increase the party’s representation in the Upper House from Tamil Nadu. With the latest development, Congress is set to have two Rajya Sabha members from the state along with representation in the state government.

The Rajya Sabha bypoll had earlier been viewed as an opportunity for Vijay’s TVK to secure its first direct entry into Parliament. However, the party chose to back its ally, highlighting the importance it places on coalition politics and alliance management.

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Union Cabinet approves Rs.10,000 crore jet fuel price stabilisation fund to support airlines

The Centre has approved a Rs. 10,000 crore Aviation Turbine Fuel Price Stabilisation Fund to support airlines and oil companies facing pressure from rising global fuel prices.

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The Union Cabinet on Wednesday approved a one-time budgetary support of up to Rs. 10,000 crore to help stabilise Aviation Turbine Fuel (ATF) prices for scheduled Indian airlines, offering relief to a sector grappling with elevated fuel costs amid global geopolitical tensions.

The government said the financial support will be provided to oil marketing companies (OMCs) to offset under-recoveries arising from supplying aviation fuel at moderated rates. The move is aimed at reducing the impact of sharp fuel price fluctuations on airlines and ensuring continuity of air services.

Why the government approved the fund

The decision comes as aviation fuel prices remain under pressure due to the ongoing crisis in West Asia, which has pushed up global energy costs. Fuel is one of the largest operating expenses for airlines and can account for up to 40% of total operating costs.

According to the government, the fund is intended to help maintain stable aviation operations and protect domestic and international air connectivity from disruptions caused by fuel price volatility.

How the fund is expected to help airlines and passengers

By cushioning the impact of rising fuel prices, the stabilisation mechanism is expected to ease financial pressure on airlines and limit the extent of fare increases that could otherwise be passed on to passengers. The support will be routed through OMCs, which have been bearing the burden of moderated fuel pricing.

Reports indicate that the fund has been designed as a stabilisation mechanism that can help the aviation sector manage periods of extreme fuel price volatility triggered by international crises.

Part of broader Cabinet decisions

The ATF Price Stabilisation Fund was among several key decisions approved by the Cabinet on Wednesday as part of a wider package covering aviation, transport and infrastructure initiatives.

The government said the measure is aimed at safeguarding the aviation ecosystem and ensuring that air services remain sustainable despite global market uncertainties.

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