Budget 2017: Sensex surges 300 points, Nifty reclaims 8,600

Benchmark indices gained as Finance Minister Arun Jaitley tabled the Union Budget for the year 2017-18.

Investors were optimistic as FM made no reference to long term or short term capital gains tax on equities. Fiscal deficit target was announced at 3.2% of GDP for FY18.

At 1:06 pm, the S&P BSE Sensex was trading at 27,947, up 291 points, while the broader Nifty50 was ruling at 8,621, up 60 points.

In the broader market, BSE Midcap and BSE Smallcap indices gained 0.6% each.

Sectors and Stocks

Nifty PSU Banks gained 0.8% led by PNB, Bank of Baroda, Union Bank of India and SBI as govt allots Rs 10,000 crore for bank recapitalisation.

BSE Realty rose 1.5% as govt allocates a record Rs 3.96 lakh crore for infrastucture development. It also plans one crore houses for poor by 2019. Unitech, Oberoi Realty, Godrej Properties and DLF rose between 1.7-3.3%.

Emami gains 4% as rural focus likely to fuel consumption.

Oil & Gas stocks gain as govt announces intend to create intergrated public sector oil major to compete with global firms. HPCL, IOC, GAIL, BPCL gain between 0.7-2%.

Tractor, fertiliser stocks zoomed as govet raised target for agri credit raised to Rs 10,000 crore. Deepak Fertilisers, Chambal Fertisers and Escorts gained 4.5%, 2.6% and 1% respectively.

Pharma sector fell over 1% on BSE Sensex dragged by Aurobindo Pharma, Lupin and Dr Reddy’s.

SBI, ITC, HDFC and ONGC were the top movers on BSE Sensex while Lupin, TCS, Infosys and De Reddy’s were the top losers.

IT index continued to fall on visa fears as H1B visa Bill to double minimum wages for H1B visa-holders was tabled in the US Congress. The development forced investors to sell IT stocks, dragging shares of  Infosys, HCL Technologies, Tech Mahindra and TCS down. The BSE IT index was fell over 2% during the morning trade.

Other Developments

Meanwhile, Fiscal deficit in the first nine months of 2016-17 was announced at 93.9% of the Budget target as against 87.9% for the same period a year ago. The gap between expenditure and revenue for the entire fiscal, has been pegged at Rs 5.33 lakh crore, or 3.5% of the GDP, for the financial year 2016-17.

Economic Survey presented yesterday forecasted that FY17 growth could dip to as low as 6.5% before picking up in FY18 to between 6.75-7.5%. Arvind Subramanian, yesterday, advocated slashing personal income tax and accelerating cuts in corporate tax rates.

On Tuesday, foreign portfolio investors (FPIs) sold shares worth a net Rs 532.88 crore, while Domestic institutional investors (DIIs) bought shares worth a net Rs 237.37 crore, provisional data available with BSE showed.