Anxious D-street indices up by 5 percent, has Sitharaman unleashed the bulls?

Source :Sify
Author :Finance Desk
Last Updated: Mon, Feb 1st, 2021, 16:55:37hrs
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Mumbai: The Dalal-Street and stock-traders across the country saw jubiliation. The BSE-Sensex, the thirty scrip sensitive index was up by 5 percent in the trading session to settle at 48,600.61.

The Sensex made a gain of 2,314.84 points within the session. The cheer also helped snap from last week's drubbing which saw the Sensex skiddle from its previous highs of 50,184 (set on 21 Jan 2021).  

The trading was largely bullish on the BSE with 1,942 stocks advancing as against 991 that reflected a decline. Most indices on the BSE were up in a range of 3-5 percent.  

Among sectors, the Realty sector was up by 6.66 percent in the session. Others that gained includes, Finance (up by 7.49%), Industrials (up by 4.88%), Bankex (8.33 percent), and Metals (5.19%).  

On the BSE, IndusInd Bank erupted as the strongest gainer with a 14 percent intra-day gain. 22.74 lakh shares of IndusInd Bank exchanged hands according to data from the index. Stocks such as ITC, Tata Steel, SBI too witnessed heavy buying.  

Banking stocks such as ICICI Bank, HDFC, HDFC Bank, Axis Bank, Kotak Bank provided much stable ground for the Sensex to soar.  

Prior to the budget, markets considered that the Government was likely impose an additional cess in order to meet revenue targets. However, there was no additional tax burden. On the contrary the Finance Minister announced sops for Dividend Distribution Tax.  

Dividend Payment to REITs and Invits has been relaxed.  

Availability of a new asset reconstruction policy that disposes bad securities and assets of lendors has also won a thumbs-up from banking stock investors.  

Motilal Oswal, MD and CEO, Motilal Oswal Financial Services, said that the FY22 Budget has been much better than the market's expectations. The feared and anticipated measures around Covid cess/higher capital gains tax/wealth tax. etc did not materialise. This will provide a huge relief to the market and the economy and help to sustain the buoyant sentiments in the economy.

Oswal said the government has clearly articulated the focus towards infra and capex spending with five key measures. "We believe this will push capex spending in the economy and augur well for the overall economic revival of India. The significant increase in allocation to the healthcare sector should lift the general well-being in the economy," he added.

Devang Mehta, Head, Equity Advisory, Centrum Broking, said this is surely an expansionary budget with a vision to spur capex, infrastructure and healthcare spending.

"The way forward for divestment, privatisation and asset monetisation looks promising. Going with a sharp correction into the budget, the street was enthused by the absence of negatives and an attempt to be focused on robust growth for the key sectors and in turn boost economic growth," he added.

Mehta said the market cheer was also led by an underlying pessimism over raising tax rates or taxing the super rich, which was prevailing in the market for the last couple of weeks.

In her shortest budget announcement, Finance Minister, Nirmala Sitharaman has also done the unthinkable by announcing a duty revision on Gold and Silver indicating that the price of the precious metals had reached beyond a threshold level. 

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