Shares of ITC surged practically four per cent, whereas these of
, and Phillips India climbed 0.3-1.Three per cent.
“There may be nothing on ITC until now. We had highlighted the low chance of any (tax) hike. Inventory might re-rate within the close to time period as inventory had corrected up to now two weeks,” stated Avneesh Roy, lead analyst with Edelweiss Securities.
Heading into the Finances, some market contributors had anticipated the federal government to lift taxes on cigarettes so as to increase its revenues by way of a Covid-19 cess or a rise within the Nationwide Calamity Contingency Fund.
It’s no shock that the inventory had remained weak in January forward of the Finances announcement, after staging a 26 per cent rally in November and December. Merchants had sharply elevated their brief positions within the February futures contract of ITC, suggesting that they concern a tax hike would come within the Finances.
Nevertheless, the perfect case state of affairs performed out for ITC and different cigarette manufacturing corporations as the federal government didn’t increase any taxes or cess on cigarette merchandise.
Brokerage agency Edelweiss Securities had famous previous to the Finances that finance minister Nirmala Sitharaman had stated that demand circumstances weren’t rosy sufficient for GST hikes.
The brokerage had additionally stated that there was a notable hike in tax on cigarettes within the earlier Finances, which made a case for tax hikes within the present Finances unlikely.