MUMBAI: In the biggest post-Budget day rally ever, market skyrocketed 777 points, its best single-day performance in nearly 7 years, after fiscal steps announced in the Budget opened up more room for RBI to ease its policy.
Finance Minister Arun Jaitley in his Budget speech yesterday made it clear that the government will go for fiscal prudence and keep deficit at 3.5 per cent for 2016-17.
This has added to the clamour that the Reserve Bank may go for a rate reduction to revive private investment and spur a fledgling growth.
Global cues remained positive as major markets in Asia and Europe ruled firm after China announced monetary easing in an attempt to bring back its economy back on track.Sentiment remained bullish, which saw the NSE Nifty take back the 7,200-mark.
The BSE Sensex closed at 23,779.35, a jump of 777.35 points, or 3.38 per cent.
Today’s gain of is the biggest single-day rise since May 18, 2009 when the 30-share barometer had jumped 2,110.79 points.
The gauge had lost 152.30 points in yesterday’s highly volatile session, mainly hit by a proposal for a higher dividend distribution tax on those earning more and a one on raising securities transaction tax on options trading.
The NSE Nifty at the close was up 235.25 points, or 3.37 per cent, at 7,222.30.
The rupee, at 67.95, was on a higher ground against the dollar (intra-day), which was lapped up by market participants.
According to a private survey, manufacturing activity expanded for the second consecutive month, which too served as as a feel-good factor.
Value-buying in several battered stocks and covering-up of short positions provided further momentum, brokers said.
UBS, the global financial services major, in a research note, said the Reserve Bank is likely to go for a 50 basis point rate cut this calender year as the Budget gives the central bank sufficient room to adopt a more accommodative stance.
Prominent gainers among the 30 Sensex stocks include ITC Ltd, ICICI Bank, Maruti Suzuki, Hero MotoCorp, Adani Ports, GAIL and Tata Motors.
Among Sensex components, 27 stocks gained, while ONGC, Hindustan Unilever and Dr Reddy’s declined.
The BSE FMCG index gained the most by surging 4.90 per cent, followed by consumer durables 4.37 per cent, realty 4.21 per cent and auto 4.19 per cent.
In line with the overall trend, the small-cap index climbed 3.23 per cent and the mid-cap was up 3.04 per cent.
Be Part of Quality Journalism
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast.