Market cheers budget 2021 Sensex skyrockets over 2,300 pts; Nifty reclaims 14,000

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Indian equities cheered Sitharaman’s Atmanirbhar Bharat Ka Budget, not only snapping a six-day losing streak, but also posted their best single-day gain since April last year.

Sensex ended at 48,600.61, up 2314.84 or 5.00%, while Nifty climbed 646.60 points or 4.74% to settle at 14,281.20.

The banking, auto, financial services, metal and realty indices gained 8-3 percent as the minister announced a string of measures to shore up the economy. Even the India VIX cooled off by 7.97% to 23.32.

“Perfect tightrope walking done by the finance minister, not imposing of any incremental tax, either on individuals or corporates is definitely a refreshing change. Focus on raising resources to allowing fair limits for insurance companies, the disinvestment of PSU. Setting up of a bad bank, as well as a new Banking & Financial Institution should ensure structural change and structural betterment in the coming years.” Sudip Bandopadhyay, Group Chairman, Inditrade Capital

On the Sensex chart, IndusInd Bank was the top gainer, rallying over 14 per cent, followed by ICICI Bank, Bajaj Finserv, SBI, L&T and HDFC.

On the other hand, Dr Reddy’s, Tech Mahindra and HUL were the laggards.

“Over all, the Budget is big on large picture and vision despite the calamitous period we have witnessed last financial year . I would give it 9.5/10.The markets were buoyant reacting to the budget proposals as no new taxes and levies have been imposed. The rationalization of tax structures for FPIs, NRIs, InvITS and REITs will also help attract more funds for capital formation in India. A consolidated Securities Market Act, Domestic Gold Exchange regulator, LIC IPO, other PSU disinvestments by showing a clear cut forward path has given tremendous boost and strengthened the markets infrastructure framework for capital formation. Tax efficient zero coupon bonds for infra financing will bring in significant flows and enhance the role of the capital markets in nation building,” said Ashishkumar Chauhan, MD & CEO, BSE.

Indian markets opened on a positive note tracking positive global bourses. During the afternoon session, the markets reacted positively to the Union Budget, traders said.

“This is indeed a bold growth-oriented budget. Absence of the much-feared COVID tax and the surcharges on income tax is a great relief. Privatisation of two nationalised banks and proposal of monetisation of assets like land are clear positives,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Sitharaman on Monday proposed more than doubling of healthcare spending while imposing a new agri cess on certain imported goods and raising customs duty on items ranging from cotton to electronics in a bid to pull the economy out of the COVID-induced trough.

She also allocated Rs 20,000 crore to recapitalise state-run banks that are saddled with bad loans and have been a drag on growth.

The revenue target from privatisation of PSUs was put at Rs 1.75 lakh crore with a planned initial public offering (IPO) of Life Insurance Corporation (LIC) among the state-run companies that will be sold in the next fiscal.

With inputs from PTI.