Budget 2024: STT Hike Jolts Capital Markets, Says Invesco's Taher Badshah

• Invesco MF's CIO Taher Badshah states the Union Budget largely met expectations, but the STT hike was a significant negative.
• The Securities Transaction Tax (STT) increased from 0.2% to 0.5%, primarily seen as a revenue-raising measure.
• Badshah estimates the STT hike could generate an additional Rs 50,000 crore in revenue, about 10 basis points of GDP.
• The hike is expected to weigh on trading volumes and may deter foreign investors in the near term, though market collapse is not foreseen.
• Defence, manufacturing, travel, tourism, railways, and roads are identified as beneficiaries, while banking stocks saw a mixed reaction.

Why It Matters: Budget 2024 met expectations on fiscal parameters, but the STT hike is a major concern for capital markets.