Why did ITC Share Price Surge Today?

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Overview of the significant increase in ITC's share price following the Union Budget 2024 announcement by Finance Minister Nirmala Sitharaman.

1

No Changes to Tobacco Taxation

FM Sitharaman's budget address announced no changes to tobacco taxation, reassuring businesses like ITC, which rely heavily on cigarettes for income.

2

Immediate Market Reaction

ITC share price rose over 5% after the announcement, opening at ₹467.05 and reaching an intraday high of ₹489.80 on the BSE.

3

Nifty FMCG Performance

Nifty FMCG index rose 2.7%, with ITC leading the gains, indicating a positive market sentiment towards the FMCG sector.

4

Analysts' Predictions

Analysts predict a positive trend for the FMCG sector, expecting a revival in rural demand to boost ITC's non-tobacco businesses.

5

Stock Performance Insights

Ruchit Jain of 5paisa noted ITC's recent upmove with good volumes as a positive sign, placing immediate support around ₹460.

6

Broader FMCG Sector Trends

The broader trend for the FMCG index is positive, with stocks in the sector witnessing good price-volume action and expected outperformance in the near term.

7

Rural Demand Revival

The Finance Minister boosted the Union Budget's rural allocation by 12%, expected to benefit ITC's non-tobacco businesses such as FMCG and Agri.

8

Tax Benefits for FMCG Companies

Higher standard deduction and revised tax rates under the New Tax Regime will result in net tax savings for individuals, immediately benefiting FMCG firms like ITC, HUL, Dabur, and Nestle.

9

Conclusion

The surge in ITC's share price is attributed to the unchanged tobacco taxation, positive market sentiment, and expected benefits from increased rural demand and tax savings for individuals.