Market rallied ahead of the Union Budget 2022-23 presentation with benchmark indices closing over 1 per cent higher on Monday, led by IT stocks. Market opened on a positive note, tracking positive global cues and gained further, witnessing across the board buying during the day. Indices closed higher, tracking gains in IT majors such as Wipro. 

The BSE Sensex closed at 58,014.17, up 813.94 points or 1.42 per cent. It recorded an intraday high of 58,257.63 and a low of 57,746.15. The Nifty 50 closed at 17,339.85, up 237.90 points or 1.39 per cent. It recorded an intraday high of 17,410.00 and a low of 17,264.15.

Breadth remains positive

The market breadth remained positive with 1,861 stocks advancing on the BSE as against 1,674 that declined while 151 remained unchanged. Furthermore, 456 stocks hit the upper circuit as compared to the 403 stocks that were locked in the lower circuit. Besides, 198 stocks touched a 52-week high level and 21 touched a 52-week low.

However, the volatility index rose 6.07 per cent to 21.95, signalling caution among investors. 

Tech Mahindra, Tata Motors, Wipro, BPCL, and Bajaj Finserv were the top gainers on the Nifty 50 while IndusInd Bank, Kotak Bank, Coal India, UPL and Hindustan Unilever were the top laggards. 

This is a crucial week for the market, which is likely to remain volatile owing to the Union Budget presentation tomorrow, according to analysts. Finance Minister Nirmala Sitharaman will present the Budget tomorrow, February 1.

Ajit Mishra, VP - Research, Religare Broking Ltd said, “Markets started the week on a strong note and settled with nearly one and a half percent gains. Firm global cues led to an upbeat start however caution ahead of the crucial event of Union Budget capped the upside. All the sectoral indices contributed to the move wherein IT, realty and PSU banks were the top gainers.” 

According to Mishra, “It’s going to be a crucial day as all participants will be closely eyeing the Union Budget. The main focus would be on the GDP growth numbers, fiscal deficit target, and disinvestment plans. Besides, sector-specific announcements and any relief on the taxation front will also be on participants’ radars. At the same time, corporate earnings and auto sales numbers would continue to induce stock-specific volatility.”

Economic Survey for 2021-22

Market sentiments were supported by favourable takeaways from the Economic Survey for 2021-22, which was tabled in Lok Sabha by the Finance Minister on Monday.

According to the Survey, the Indian economy is projected to grow 8-8.5 per cent in 2022-23 aided by strong capex and export push, the projections are based on key assumptions that include global crude oil prices at $70-75 per barrel, no further debilitating pandemic-related economic disruptions, a normal monsoon, an orderly withdrawal of global liquidity by major central banks, and an easing of global supply-chain disruptions over the coming year. For the current fiscal, the Economic Survey has pegged growth at 9.2 per cent.

Vinod Nair, Head of Research at Geojit Financial Services said, “Taking positive cues from global markets and favourable takeaways from the Economic Survey report, the market rallied ahead of the Budget day with all major sectors in the green.”

“The major macro indicators of the survey gave confidence that the country is well placed to face future challenges with GDP growth for FY23 projected at 8-8.5 per cent. Global markets turned positive backed by gains in the US market as investors ignored geopolitical disturbances and turned their eye towards strong earnings numbers from tech firms,” added Nair. 

“The economic growth projections for FY23 look very robust. A reasonably strong nominal GDP growth means we are looking at a healthy next fiscal year. This will also mean that tax collections will continue to remain robust and economic revival will gain further traction. Based on these projections, we remain very constructive on the future prospects,” said Naveen Kulkarni, Chief Investment Officer, Axis Securities.

All in green

On the sectoral front, all indices closed in the green. IT, realty and PSU Bank stocks recorded higher gains.

Nifty Realty closed over 3 per cent higher while Nifty PSU Bank was up nearly 3 per cent. Nifty IT was up 2.87 per cent.

Nifty Auto and Nifty Consumer Durables were up nearly 2 per cent each. Nifty Oil & Gas, Nifty Pharma, and Nifty Healthcare Index each closed over 1 per cent higher. 

Broader indices

Broader market also recorded gains with broader indices closing in the green.

Nifty Midcap 50 was up 1.67 per cent while Nifty Smallcap 50 was up 1.43 per cent. The S&P BSE Midcap was up 1.76 per cent while the S&P BSE Smallcap was up 0.99 per cent.

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