By Yoosef Kp & Ruchit Purohit

The equity market witnessed some wild swings on the Budget Day, with the Sensex rebounding after losing more-than 2% from the day’s high. But unlike other Budget Days, benchmarks ended the day in the green, as investors cheered a growth-oriented Budget. After surging as much as 1,018.03 points in intra-day, the Sensex settled at 58,862.57, up 848.40 points or 1.5%, while the Nifty50 ended 237 points higher at 17,576.85. The BSE Midcap and SmallCap indices added about 1% each on Tuesday. Both the Sensex and the Nifty50 had gained similar magnitude on Monday.

Markets have been very volatile in the previous two years, with the Sensex losing 1% and 2.43%, respectively, on the budget day in 2019 and 2020. While the benchmark indices ended the day in the green on Tuesday, market participants are of the view that the lack of measures to curb high inflation and rising crude oil prices will remain a key concern for the market in the near to short term. The government’s record borrowing plans for the next financial year sent benchmark bond yields to two-and-a-half years high.

The bulls, however, cheered the announcement of capping surcharge on the long-term capital gains (LTCG) at 15%, irrespective of the amount of long-term capital gains. The move will be beneficial for those investors who hold the shares at least 12 months before selling.

Also Read | Union Budget 2022: Tata Motors, SBI Bank shares among top post-Budget money-making bets

The rebound in equity markets, however, failed to push the rupee up as the local currency lost 18 paise against the greenback to close at 74.80.

Dhiraj Relli, MD & CEO, HDFC Securities, said, “The Budget is growth-inducing and does the heavy lifting by sharply increasing capital expenditure. The focus on boosting manufacturing as well as an underlined emphasis on areas such as startups, modern mobility and clean energy, shows the FM has prioritised long-term growth.”

The government’s growth-oriented policies will support FPI (foreign portfolio investor) investments and boost confidence in the capital markets in the long-term. The finance minister also said the IPO of LIC will be announced soon. According to sources privy to FE, the draft red herring prospectus will be filed between February 8 to February 10.

Suresh Agarwal, MD & CEO, Kotak Mahindra General Insurance Company, said: “It is a growth-oriented budget, focused on high economic activity, covering critical segments of the economy, building on the Atmanirbhar Bharat Agenda. Helps to create a positive environment going forward.”

Among BSE sectoral indices, BSE Metal Index surged the most, amid expectation that the government’s allocation of Rs 60,000 core for piped water to cover 3.8 crore households in FY23 and spending on logistics will benefit metal producers.