The benchmark indices ended in the positive territory supported by the metal, IT, FMCG, and capital goods stocks. Sensex and Nifty ended on positive note in the highly volatile session on February 1, a Budget Day, mainly supported by the metal, pharma and capital goods stocks. At close, the Sensex was up 848.40 points or 1.46 per cent at 58862.57, and the Nifty was up 237.00 points or 1.37 per cent at 17576.80. About 1683 shares have advanced, 1583 shares declined, and 98 shares are unchanged.
Tata Steel, Sun Pharma, IndusInd Bank, Shree Cements and Hindalco Industries were the top Nifty gainers, while losers included BPCL, IOC, Tata Motors, M&M and SBI Life Insurance.
Moreover, analysts said the Budget continued the focus on ‘quality’ expenditure and increased the capex by 35 per cent in key sectors like Infra, housing, defence and agriculture, etc which is ought to have a multiplier effect on the economy. Apart from public-private investments, clean energy focus is amply clear with additional allocation to Solar PLI and policy around battery swapping. Moreover, the focus is also on inclusive growth as several measures were announced to ease supply-side issues and promote domestic manufacturing.
In the broader market, the BSE MidCap index closed with a gain of 1 per cent while the BSE SmallCap index ended 0.9 per cent up. Volatility index, India VIX, cooled off 9 per cent to end below the 20-mark.
Sectorally, the Nifty PSU Bank index ended in the red, down 0.6 per cent, as the Budget document remained silent on PSB privatisation. The Nifty Auto index was another loser on the bourses today which closed 0.7 per ent down.
On the upside, the Nifty Metal index zoomed nearly 5 per cent after the government announced Rs 7.5 trillion capex plans for the financial year 22-23. Moreover, the government also proposed to extend the customs duty exemption on steel scrap by one year.
The government has pegged divestment target for fiscal year 2022-23 at Rs 65,000 crore, down from Rs 78,000 crore revised estimate for FY22. FM Sitharaman said Indian economy in a strong position to withstand global challenges. She has pegged FY23 fiscal deficit at 6.4 per cent of the GDP while FY22 fiscal deficit has been revised to 6.9 per cent from 6.8 per cent budgeted earlier.
B Gopkumar, managing director & chief executive officer, Axis Securities, said “Capital Markets love a budget big on spending, and the budget 2022-23 has delivered on this front! Capital expenditure of Rs 7.50 lakh crore, a 35 per cent increase from last year, is a significant long-term positive. Coupled with the fiscal deficit target of 6.4 per cent of the GDP, this budget showcases the government’s commitment to growth. We see an increase in expenditure on housing to the tune of Rs 48,000 crore will boost affordable housing. No major tinkering of taxation is also good for the markets. The markets will welcome this budget as this helps the GDP growth rate, which will remain high. Overall, a simple, futuristic, growth-oriented budget from the government.
“We believe infrastructure will perform well, clearly because of the great impetus. Cement and Metals should also start picking up. Banking should see improvement in the forthcoming quarters, with GDP growth aiding credit growth,” said Gopkumar.
In the last 10 Budgets (excluding interim Budgets of 2019, 2014), Nifty50 has fallen seven times on the D-Days. Besides, the last few years have seen extreme volatility on Budget days as suggested by the daily index movements.
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Mohit Nigam, Head – PMS, Hem Securities, said: “Union Budget 2022 will be announced today. Markets might face excessive volatility today. Intraday traders have to be little cautious today as historically it is observed that markets show huge swing movements on budget day on either side.”
“On the technical front, the key resistance levels for Nifty50 are 17,410 followed by 17,490 and on the downside 17,270 followed by 17,190 can act as strong support. Key resistance and support levels for Bank Nifty are 38,250 and 37,700 respectively,” said Nigam.
Rupee reverses gains, trading 22 paise lower at 74.87 post Budget speech
The rupee pared its initial gains and was trading 22 paise lower at 74.87 against the US dollar on Tuesday, even as the domestic equity market was trading with significant gains. Investors were cautious after Finance Minister Nirmala Sitharaman on Tuesday said that the fiscal deficit in 2021-22 will be 6.9 per cent of GDP and 6.4 per cent in 2022-23, forex traders said.
Global cues
The US benchmark indices logged gains on Monday for a second session to wrap up a rough January on the back of buying in tech shares. The Dow Jones gained 1.2 per cent, the S&P 500 jumped 1.89 per cent and the Nasdaq index ended 3.4 per cent higher. In Asia, markets in mainland China, Hong Kong, South Korea and Singapore are closed for a holiday. In Japan, the Nikkei 225 index was trading 0.75 per cent higher.
Oil prices also rose on Monday to end January on a higher note, amid a supply shortage and political tensions in Eastern Europe and the Middle East. The Brent Crude ended 1.3 per cent higher to $91.21 a barrel.
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