Sensex soars by 848 pts after some volatility
Mumbai, Feb. 1: The Sensex soared by 848 points while the Nifty reclaimed the 17,500mark on Tuesday after finance minister Nirmala Sitharaman unveiled a bigger `39.45 lakh crore Budget. Metal, realty and cement stocks saw robust buying, while selling in auto and telecom capped the gains.
After a strong start, the BSE Sensex succumbed to a sudden bout of selling, but staged an immediate rebound to end at 58,862.57.
The broader NSE Nifty surged 237 points, or 1.37 per cent, to end at 17,576.85. Tata Steel hogged the limelight in the Sensex pack.
The stock market remained volatile after a positive opening, factoring in the proposals of a capex-heavy Budget with a focus on infrastructure-led economic growth but failed to fulfil the common man's expectations. Infrastructure focus led to significant gains in metal, capital goods, cement and engineering and construction companies' stocks.
The Sensex, having moved up by over 1000 points to 59032 in the first one hour after commencement of the Budget speech later surrendered all the gains dipping over 1150 points and touching a low of 57737, as there was no personal income tax slab relief and tax benefits enhancements, besides the divestment target for FY22 as well as FY 23 were pegged lower.
However, later the market regained upward momentum on more clarity emerging from the Budget documents. The Sensex again rose over 1000 points to finally close 848.40 points or 1.46 per cent up at 58,862.57.
The Nifty-50 closed at 17576.85, up 237 points or 1.37 per cent. The broader market underperformed, with the BSE Mid-cap Index up 1.08 per cent and Small-cap 0.92 per cent.
Defence manufacturing companies' stocks gained as the finance minister announced that 68 per cent of the defence capex will be kept for domestic firms.
Metal stocks were big gainers, led by Tata Steel (7.57 per cent) which also gained on Neelachal Ispat buy as well as Budget's higher capex, infra focus and announcement that certain anti-dumping duties and countervailing duties will be revoked on stainless steel and coated steel flat products, parts of alloy steel and high-speed steel, boosted sentiments.
Customs duty exemption given to steel scrap last year being extended for another year to provide relief to MSME secondary steel producers was also a positive for the steel sector.
The BSE Metal Index gained 4.92 per cent while Capital Goods Index gained 2.93 per cent.
The focus on consumption and no adverse announcements relating to tobacco products boosted FMCG stocks like ITC (up 3.45 per cent.)
"Not giving in to spending on populist measures and over-spending on capex shows a strong resolve to do the right thing for the long-term, at the cost of short-term benefits," said Amisha Vora, joint MD, Prabhudas Lilladher.