Indices Log Highest Ever Budget-Day Gain; Sensex Ends 2315 Points Higher

Indian markets cheered the Budget 2021 with investor wealth jumping by Rs 5.25 lakh crores. The session ended with highest-ever Budget day gains of 2315 points or 5% on the Sensex at 48600, while Nifty zoomed by 4.74% or 646 points at 14281.

In her Budget 2021 speech, Finance Minister Nirmala Sitharaman pegged fiscal deficit at 9.5% of GDP. She also laid out capex plan of Rs. 5.54 trillion for FY 21-22 in comparison to the last year's outlay of Rs. 4.39 trillion.

Top gainers during the session on the Nifty include IndusInd Bank, ICICI Bank, Bajaj Finserv, SBI and Larsen & Toubro, while laggards include UPL, Dr. Reddy's, Cipla, Tech Maindra and HUL.

Nifty Bank was the outlier in trade today with gains of over 8% led by gains in ICICI Bank, HDFC Bank, SBI, Axis Bank, Kotak Mahindra Bank. This was after the FM said the centre would infuse Rs. 20000 crore into PSBs in the FY 2021-22 for complying with regulatory guidelines. Also, an entity would be established via an Asset Reconstruction Company (ARC) model for addressing bad loans of banks.

All of the Nifty sectoral indices barring Nifty Pharma gained in trade today. Broader markets underperformed headline indices and settled with gains of 3.3% on the Nifty Midcap 100.

In its Budget 2021 proposals, FM announced voluntary vehicle scrapping policy, the move lifted the sentiment of auto sector and there were gains on the Nifty Auto index of over 4%, led by surge in stock price of Maruti, Tata Motors, Eicher Motors, Bajaj Auto and M&M among others.

Realty sector also gave thumbs up to the FM's move of extending the timeline for claiming deduction in respect of payment of interest on affordable housing by 1 year. Nifty Realty gained up to 4%, with major gainers being DLF, Phoenix Mills, Indiabulls Real Estate.

The Finance Minister allocated Rs 1.18 trillion for the Ministry of Road Transport and Highways, the move fuelled gains in infrastructure firms engaged in roads and highways construction such as NCC, Ashok Buildcon, KNR Constructions among others.

We expect this budget rally to extend further however participants should be selective in their approach now. Going ahead, global cues and corporate earnings would also be on the radar. The way the banking index moved on the budget day, we feel it could lead the next leg of the rally alongside infra counters, views Ajit Mishra, VP - Research, Religare Broking

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