Share market analysts welcome new allotments as Sensex soars
THE BUDGET PEGGED THE FISCAL DEFICIT FOR FY22 AT 6.9% AND ANNOUNCED NEW INVESTMENTS IN INFRA SECTOR TO BOOST THE ECONOMY
NEW DELHI: Indian share markets gave a thumbs up to the Union Budget on Tuesday after finance minister Nirmala Sitharaman, who presented her fourth Budget in Parliament, made announcements to boost growth amid continued disruption from Covid-19 pandemic and rising inflation.
The Budget pegged the fiscal deficit for FY22 at 6.9% and announced new investments in the infrastructure sector to boost the economy. The Budget also proposed a new digital rupee based on blockchain technology, and a 30% tax on virtual digital assets. Sitharaman also said the 5G spectrum auction and rollout will happen in FY23.
On Tuesday, the benchmark indices made a jump start ahead of the presentation of the Budget.
The Sensex soared 600 points in opening trade with the help of major gains in Sun
Pharma, ITC, and Infosys.
The index surged to a high of 59,032.20, or over 1,000 points, before settling at 58,862.57, 849.40 points higher, amid a slight volatility on account of the Budget announcements. Similarly, the Nifty50 jumped above 17,600, surging close to 300 points, before closing at 17,576.85, or 1.37%, higher.
According to market experts and investors, the Budget was a growth and infrastructure oriented Budget which ticked all the correct boxes. The enthusiasm reflected on almost across all the counters. Among the stocks on the Sensex, Tata Steel surged over 7.2%, Sun Pharma 6.7%, and IndusInd Bank 5.65%. Textile stocks also soared after the Budget incentivized exports. Other stocks that performed well are L&T, ITC, Ultratech, Infosys. On the other hand, M&M, Bharti Airtel, SBI, PowerGrid, Reliance were among the losers.W
While there was little relief on the personal income tax front, capping of surcharge on LTCG and easing of tax compliance, with no other negative surprises, share market analysts believe the focus on spending more would create employment opportunities and help in kick-starting the investment cycle which in turn would help to strengthen the economic growth.
Analysts also 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 of the country.