Sensex zooms 2,000 pts after Sitharaman's speech; investor wealth swells by Rs 5 lakh cr

Investors on Dalal Street gave thumbs to the Union Budget as the benchmark equity indices BSE Sensex and NSE Nifty surged over 4% after Finance Minister Nirmala Sitharaman presented the key policy document on Monday.

The 30-share Sensex index zoomed as much as 2,096 points to an intraday high of 48,381. As a result, the market capitalisation of BSE-listed firms jumped by Rs 5.20 lakh crore to Rs 191.32 lakh crore (at around 2.10 pm). Likewise, the 50-share Nifty index vaulted as high as 580 points to an intraday high of 14,214.

Commenting on the Union Budget, Amar Ambani, Senior President & Institutional Research Head, YES Securities said, “The Budget rightly decided to focus on economic growth by raising expenditure and allowing for a wider fiscal deficit in these pandemic times. Importantly, spending on capital expenditure is far higher at 2.5% of GDP vis-à-vis 1.7% last year, a move in the right direction. Domestic manufacturing is going to be a big growth engine with previous corporate tax reductions, correction of inverted duty structures and a lot more subsidy to come on the PLI front.”

As many as 42 stocks in the Nifty index traded in the green with IndusInd Bank gaining the most 11%. It was followed by ICICI Bank (up 10%), Bajaj Finserv (up 8%), SBI (up 7.83%), HDFC (up 7.76%), HDFC (up 7.76%). On the other hand, UPL, Dr Reddy’s and Tech Mahindra each declined over 2%.

“The widely expected allocation increases to housing, infrastructure, health and textiles, the move to curb prolonged tax scrutiny and firm mindset shown to privatise certain PSUs, creation of ARCs for bad loans and monetise government land banks are steps in the right direction. What appealed most to the stock market was the absence of moves like wealth tax or increase in LTCG on equity investments. Unless there are any devils in the fine print, the Budget has been kept simple and played the right cards,” said Ambani.

Also Read: How Sensex moved on Budget day in last 10 years

Among the sectoral indices on the NSE, Nifty Bank index was up 6% at 32,415 at around 2.18 pm (IST). Nifty Auto, Nifty PSU Bank, Nifty Private Bank and Nifty Realty also gained between 3%-6%.

Motilal Oswal, MD & CEO, Motilal Oswal Financial Service said, “The FY22 budget has been much better than the market’s expectations. The feared and anticipated measures around Covid-cess, higher capital gains tax or wealth tax did not materialise. This will provide a huge relief to market and economy and help in sustaining the buoyant sentiments in the economy.”

“All in all, a very good budget which avoids the pitfalls of raising taxes and at the same time provides a boost to the Capex or infra spends in the economy,” Oswal added.