A historical Budget saw an equally historic rise! Indian market snapped six-day losing streak to rise nearly 5 percent as investor cheered Budget proposals made by Finance Minister Nirmala Sitharaman on February 1. At close, the Sensex was up 2,314.84 points or 5 percent at 48600.61, and the Nifty was up 646.60 points or 4.74 percent at 14281.20.
The Budget which comes in the backdrop of a pandemic-ridden year focused on six pillars- Health and Wellbeing, Physical and Financial Capital, and Infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D and minimum government and maximum governance. Moreover, lack of taxation reforms also cheered the market.
“Bank Nifty has been bucking the trend since the last couple of sessions, while the broader market was correcting brutally. This outperformance has now turned into leadership. Hence, staying beyond 33,000 unfolds fresh leg of the rally for the banking index. Above this, next levels to watch would be 34,500-35,000,” said Sameet Chavan, Chief Analyst-Technical and Derivatives – Angel Broking.
Barring pharma, all other sectoral indices ended in the green with a gain of 1-8 percent. Broader markets underperformed the main indices with BSE Midcap and Smallcap indices rising 2-3 percent each.
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IndusInd Bank, ICICI Bank, Bajaj Finserv, SBI and L&T were among top gainers on the Nifty, while losers included UPL, Dr Reddy’s Labs, Cipla, Tech Mahindra and HUL.
“Overall, the Budget is big on large picture and vision despite the calamitous period we have witnessed in last financial year. I would give it a 9.5/10 rating. The markets were buoyant reacting to the Budget proposals as no new taxes and levies have been imposed. The rationalisation of tax structures for FPIs, NRIs, InvITS and REITs will also help attract more funds for capital formation in India,” said Ashishkumar Chauhan, MD & CEO, BSE.
Stocks & sectors
All the sectoral indices ended in the green with the Banking index rising over 8 percent and Realty index more than 6 percent.
A volume spike of more than 100 percent was seen in ICICI Prudential, ITC and HDFC Life.
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Long buildup was seen in SAIL, ICICI Prudential and IndusInd Bank, while short buildup was seen in Cipla and IDFC First Bank.
Over 150 stocks including Grasim Industries, ICICI Bank and NCC hit a fresh 52-week high on the BSE.
Lack of negative surprises in the Budget appears to have triggered a huge short-covering rally, especially in financials, owing to which Nifty witnessed a historic single-day gain of close to 5 percent which on the candlestick charts depicted a Long White Day formation, said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in.
While the initial target for this leg of upswing can be a retest of life highs present around 14753 levels, some profit-booking in next trading session can’t be ruled out as individual stocks across the board witnessed huge surge along with the indices, he added.