Sensex soars 5 per cent on the back of growth-oriented Budget proposals, banks surge on strategic stake sale
Markets went on a rally on the day of the Union Budget 2021-22 with the S&P BSE Sensex reaching a high of 48764.4 before closing 5 per cent up at 48600.61. The broader NSE Nifty hit 14336.35 in intraday trading and ended the day 4.7 per cent higher at 14281.2.
“The market spike shows that participants are encouraged by the government’s focus on growth, by spending more on social sectors like infrastructure, healthcare and agriculture,” says Ajit Mishra, VP- Research at Religare Broking.
Broader market indices like midcap 100 and small cap 100 of the NSE ended up higher by 3.3 per cent and 2.01 per cent, respectively. Sharp spike was seen in sectors like banking, financial and realty with the gains of over 5 per cent.
“After showing a sharp weakness in the last six sessions, Nifty witnessed an excellent comeback on Monday and recorded hefty gains of 646 points. After opening on a positive note, the market shifted into a minor consolidation in the early part of the session,” says Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The BSE broad market indices like BSE Midcap and Smallcap were up by 3 per cent. Experts attribute the rally in bank, infrastructure, materials and metals sectors to the announcement of disinvestment plans and spending thrust in the Union Budget.
“This is a market-friendly budget with respect to equity markets at first glance. The equity markets have run up on valuations and it is imperative that earnings growth catches up. To that extent, the loosening of purse strings as a counter-cyclical measure, increase in planned capex, and the neutrality on direct taxes are meaningful positives that provide greater confidence on earnings growth mean reverting to high double digits,” says Rajeev Radhakrishnan, CIO-Fixed Income at SBI Mutual Fund.