The Sensex soared nearly 1,200 points while the NSE Nifty reclaimed the 14,600-mark on Tuesday as the post-Budget rally continued for the second session with brisk buying in banking, finance and infra stocks. Supportive global cues and fresh foreign fund inflows added to the momentum, traders said. After briefly topping the 50,000-level, the 30-share BSE Sensex ended 1,197.11 points or 2.46 per cent higher at 49,797.72. Likewise, the Nifty advanced 366.65 points or 2.57 per cent to end the session at 14,647.85.
Together with Budget day gains, the Sensex has amassed 3,511 points or 7.58 per cent in two sessions, and the Nifty has accumulated 1,007.25 points or 7.38 per cent. SBI was the top performer on the Sensex chart on Tuesday, darting up 7.10 per cent, followed by UltraTech Cement, HDFC Bank, L&T, Bharti Airtel, Maruti Suzuki and Kotak Bank. Only three index constituents suffered losses — Bajaj Finserv, Titan and HUL, shedding up to 2.34 per cent.
Most analysts are of the view that the equity markets reacted positively to the Budget primarily due to higher capital expenditure plans, status quo on direct taxes and no incremental taxes on capital gains. On Monday, foreign institutional investors bought equities worth a net Rs 1,494.23 crore, as per exchange data.
Economists and market analysts opined that this is a bold growth-oriented Budget and the absence of the much-feared 'COVID tax' and surcharges on income tax is a great relief. Besides, privatisation of two nationalised banks and proposal of monetisation of assets like land are clear positives, according to them.
Market response to the Budget reflects growth optimism and the government has presented a pragmatic, bold and visionary Budget in these difficult times, they said. "Start of a new rally is noticed in sectors like banking, infra and auto, supported by a renewed traction provided by a growth-oriented Budget. After consecutive selling by FPIs last week, the market witnessed a reversal in trend becoming net buyers post the Budget. "Positive global sentiments ahead a new US COVID support bill also lifted the market," said Vinod Nair, Head of Research at Geojit Financial Services.
In sync with the benchmark, BSE industrials, auto, capital goods, realty and banking indices rose as much as 4.23 per cent. All 19 sectoral indices closed with gains. Broader small cap and midcap indices underperformed the benchmark, rising 1.59 per cent and 2.26 per cent, respectively. On the other hand, the large-cap gauge outperformed the Sensex, gaining 2.49 per cent. Elsewhere in Asia, stock markets closed with gains on Tuesday amid signs of progress in US stimulus talks. Bourses in Europe were also trading in the green in early deals. On the forex market front, the rupee ended 6 paise higher at 72.96 against the US dollar.