Sensex touches 50,000 again, ends at new high

MUMBAI: Indian stocks rallied to record highs on Tuesday, boosted by gains in financials and infrastructure stocks, after the government unveiled plans to hike spending to revive growth in the country’s pandemic-hit economy.

The benchmark S&P BSE Sensex closed 2.46% higher at 49,797.72, while the NSE Nifty 50 index climbed 2.57% to 14,647.85. The benchmark index breached the 50,000mark earlier in the session, surging as much as 3.2% to 50,154.48.

Supportive global cues and fresh foreign fund inflows added to the momentum, traders said.

Together with Budget day gains, the Sensex has amassed 3,511 points, or 7.58%, in two sessions, and the Nifty has accumulated 1,007.25 points, or 7.38%.

Earlier on January 21, the benchmark had reached the momentous 50,000-mark. The 30-share BSE index had jumped to its all-time peak of 50,184.01 on that day.

In its Union Budget tabled in Parliament on Monday, the Centre boosted healthcare spending by 135%, lifted caps on foreign investment in its vast insurance market, and increased capital expenditure for fiscal year 2021-2022 by 35%.

SBI was the top performer on the Sensex chart on Tuesday, darting up 7.10%, followed

SENSEX CLOSED 2.46% HIGHER AT 49,797.72, WHILE THE NSE NIFTY 50 INDEX CLIMBED 2.57% TO 14,647.85

Bank, L&T, Bharti Airtel, Maruti Suzuki and Kotak Bank. Only three index constituents suffered losses — Bajaj Finserv, Titan and HUL — shedding up to 2.34%.

In sync with the benchmark, BSE industrials, auto, capital goods, realty and banking indices rose as much as 4.23%. All 19 sectoral indices closed with gains. Broader smallcap and midcap indices underperformed the benchmark, rising 1.59% and 2.26%, respectively. On the other hand, the largecap gauge outperformed the Sensex, gaining 2.49%.

Home loan provider Housing Development Finance Corp (HDFC) pared some gains, but ended 3.1% higher after reporting a quarterly profit that beat analyst estimates. India’s largest private lender HDFC Bank was the top boost, rising 5.7% and helping the Nifty Bank index end the day 3.56% higher.

The benchmark auto index rose 4% after the finance minister announced a new voluntary scrappage policy, while a string of auto companies like Maruti Suzuki India and Tata Motors reported higher sales for January

Most analysts are of the view that the equity markets reacted positively to the Budget primarily due to higher capital expenditure plans, status quo on direct taxes and no incremental taxes on capital gains.

On Monday, foreign institutional investors bought equities worth a net ₹1,494.23 crore, as per exchange data.

Economists and market analysts opined that this was a bold growth-oriented Budget and the absence of the muchfeared “Covid-19 tax” and surcharges on income tax was a great relief. Besides, privatisation of two nationalised banks and proposal of monetisation of assets like land are clear positives, according to them.

Market response to the Budget reflects growth optimism and the government has presented a pragmatic, bold and visionary Budget in these difficult times, they said. “Start of a new rally is noticed in sectors like banking, infra and auto, supported by a renewed traction provided by a growth-oriented Budget. After consecutive selling by FPIs last week, the market witnessed a reversal in trend becoming net buyers post the Budget. Positive global sentiments ahead a new US Covid-19 support bill also lifted the market,” said Vinod Nair, head of research at Geojit Financial Services.

Elsewhere in Asia, stock markets closed with gains on Tuesday amid signs of progress in US stimulus talks. Bourses in Europe were also trading in the green in early deals. On the forex market front, the rupee ended 6 paise higher at 72.96 against the US dollar.