Mumbai: Markets roared back to life on Monday after six days of deep declines as Finance Minister Nirmala Sitharaman presented an expansionary Union Budget for 2021-22 which sought to pull the economy out of the pandemic-induced slump through increased spending on infrastructure, healthcare and farm sectors without resorting to higher taxation.
The 30-share BSE Sensex zoomed 2,314.84 points or 5 per cent to finish at 48,600.61. This was its second-biggest single day jump in absolute terms and the best day in almost 10 months. On similar lines, the broader NSE Nifty soared 646.60 points or 4.74 per cent to finish at 14,281.20.
The benchmarks were propelled by across-the-board buying, with banking and finance stocks leading the charge. IndusInd Bank topped the Sensex gainers’ chart with a jump of 14.75 per cent, followed by ICICI Bank, Bajaj Finserv, SBI, L&T and HDFC.
Only three index components closed in the red — Dr Reddy’s, Tech Mahindra and HUL, shedding up to 3.70 per cent. Tabling the Budget for 2021-22 in Parliament, the finance minister proposed more than doubling healthcare spending, enhancing capital expenditure to Rs 5.54 lakh crore and and introduced an agri infra cess of up to 100 per cent on some goods to create post-harvest infrastructure for improving farmers’ income.
But to reduce the burden on consumers, the customs or import duty on these items was cut. A cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel was also slapped but this was offset by a reduction of an equivalent amount in the excise duty — making it price neutral for consumers.
The government projected a fiscal deficit of 9.5 per cent of the GDP for the current fiscal, hit by the COVID-19 pandemic, and 6.8 per cent in 2021-22 as it sought to strike a balance between supporting growth and maintaining fiscal discipline.
“It has been a great Budget in the current pandemic. Market has given a clear thumbs-up. One couldn’t have asked for more, of the total borrowings of Rs 1,50,000 crore a whopping Rs 1,20,000 crore is going for investment. Clearly the government has sacrificed fiscal deficit for growth.
All sectoral indices ended with strong gains. BSE bankex, finance, realty, capital goods and metal indices rallied up to 8.33 per cent. Broader BSE midcap and smallcap indices surged as much as 3.03 per cent.
On the currency front, the rupee slipped 6 paise to settle at 73.02 against the US dollar. Global markets were on an upswing amid increased retail participation in select stocks. Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended in the positive territory.
Stock exchanges in Europe were also trading with significant gains in mid-session deals. Meanwhile, the global oil benchmark Brent crude futures rose 0.89 per cent to $55.51 per barrel.