Sensex surges 2,100 pts, Nifty tops 14,200 level post Budget 2021 presentation; what fueled the up move?

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Updated: February 01, 2021 2:39 PM

Indian share markets cheered the Union Budget 2021 announcements and zoomed over 4 per cent after the FM Nirmala Sitharaman concluded her Budget speech

Sensex, Nifty, stock marketOut of 30 Sensex stocks, 26 scrips were trading in the green, led by IndusInd Bank, up 11.36 per cent. Image: Reuters

Indian share markets cheered the Union Budget 2021 announcements and zoomed over 4 per cent after the FM Nirmala Sitharaman concluded her Budget speech. BSE Sensex reclaimed its crucial 48,350-mark, while the broader Nifty 50 index crossed 14,200 level. According to the market watchers, the absence of any negative was the biggest positive for the D-Street. BSE Sensex hit an intraday high of 48,381.57, while Nifty 50 touched 14,214.80. Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, told Financial Express Online that the FM Nirmala Sitharaman did not tamper with STT, or LTCG which could have otherwise spooked the markets.

Vaishnav also added that laying the prominence of disinvestment, especially of LIC has gone right. “I also feel that the overall net-borrowing of the government and the deficit figure is very much in control,” he added. Also, Union Budget 2021, did not bring about too many tax amendments. AR Ramachandran, Co-founder & Trainer, Tips2Trade, told Financial Express Online that since the Budget did not have any additional cess or taxes to burden or negatively impact investors sentiment, the overall market has reacted in a very positive manner. He further added that the Budget was neutral to positive for infrastructure, real estate startup and public sector banks. This led to buying which has temporarily improved market sentiment leading to sharp intraday rally.

Markets have welcomed the Union Budget 2021 as it was growth-oriented. Gaurav Garg, Head of Research at CapitalVia told Financial Express Online that absence of the much-feared COVID tax and the surcharges on Income Tax is a great relief. Prominence was laid on disinvestment and increased spending to revive the economy.

Top BSE Sensex gainers

Out of 30 Sensex stocks, 26 scrips were trading in the green, led by IndusInd Bank, up 11.36 per cent. ICICI Bank, Bajaj Finserv, State Bank of India, Housing Development Finance Corporation (HDFC), Axis Bank, among others were the top BSE Sensex gainers. Nifty Bank index was the top sectoral gainer, surging over 8 per cent in the intraday deals. Nishant Shah, Partner, ELP, told Financial Express Online that the key reasons for Sensex, Nifty’s over 4 per cent intraday up move include an update on divestments, which will keep the capital markets on upward trend, relaxation in certain income tax provisions which were directed towards ease of doing business, opening up of FDI in the insurance sector, announcements relating to zero per cent coupon infra bonds and updates on the indirect tax front.

Was it a never-like before the budget?

Krishna Kumar Karwa, Managing Director – Emkay Global Financial Services, said that FM delivered her promise of a budget that will be remembered for 100 years. “A budget with no changes in Direct taxes will certainly be remembered for years to come,” Karwa said. Equity markets will be enthused with no tinkering in capital gains taxes or STT or any form of Covid tax.

Garg added saying that this budget can be considered a “never like before Budget” as the FM has quite a lot of issues to address which have disrupted the Indian economy. The budget is focused on India’s growth and tailored to accelerate the growth rate. The investment on health infrastructure in this budget has increased substantially. “Considering the allocations to various sectors and the initiatives like Atma Nirbhar, Swasth Bharat Yojana and National Research Foundation, the government seems focused on the long-term growth of the economy,” he added.

Binod Modi, Head Strategy, Reliance Securities, told Financial Express Online that undoubtedly, it was a pro-growth and constructive budget with a focus on sustaining economic growth momentum and job creation. More importantly, it did not give any meaningful negative surprise to the market in terms of the imposition of Covid-19 cess and higher direct taxes. “However, the government could have done more to ease out demand-side issues by ensuring higher disposable income in the hands of people. Nonetheless, it was overall a good budget and mostly on expected lines,” Modi added.

Do you know What is Finance Bill, Short Term Capital Gains Tax, Fiscal Policy in India, Section 80C of Income Tax Act 1961, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

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