Nifty records best gain in five years on Budget day

Nifty has recorded its best gain in past five years on Budget day, by gaining nearly one percentage points, after the Finance Minister Arun Jaitely in his first Budget which focussed on growth.

The National Stock Exchange (NSE) Nifty index closed higher by 57 points or 0.65% at 8,902 today, recorded its sharpest gain, in percentage as well as in points terms, on Budget day in past five years. Earlier, in 2010, the benchmark index had surged 63 points or 1.3% on Budget day.
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The S&P BSE Sensex ended 141 points or 0.48% higher at 29,362, also logged its best gain on Budget day in points terms since 2010, according to data compiled by Business Standard Research Bureau.

Banking shares mainly from private sector, pharmaceutical and automobiles were the largest gainer, rallied by up to 9%.

Axis Bank, IndusInd Bank, Yes Bank, Kotak Mahindra Bank and ICICI Bank rallied between 4-9% on hopes that Finance Minister Arun Jaitley’s proposal to simplify the procedures for local companies to attract foreign investments is likely to favour select private sector lenders who will now be able to raise additional money from foreign institutional investors (FIIs).

Sun Pharma Advanced Research Company (SPARC), Aurobindo Pharma, Sun Pharmaceutical Industries, Ranbaxy Laboratories and Dr Reddy’s Laboratories closed higher between 3-7% after the finance minister announced measures for improving the quality of life and public health.

Parizad Sirwalla – Leader Global Mobility Services – Tax KPMG said Budget 2015 gave a positive economic outlook. There is enhanced public spending resulting in higher fiscal deficit target of 3.9% of GDP.

“Resources freed from lower commodity and oil prices have been judiciously deployed in a well thought out way. In addition, concrete timeline of implementation of GST (April 2016), realignment of DTC by lowering the corporate tax rates to 25% over the next four years, urgency to lift infrastructure requirements, focus on health, education and security of individuals amid limited populism and fiscal discipline, clearly indicates the progressive nature of the Union Budget 2015-16,” Anup Bagchi, MD & CEO, ICICI Securities on the union budget.

However, BHEL, Mahindra Lifespace, Punj Lloyd, Adani Ports, Unitech, Astra Microwave, Hindustan Construction Company, Pipavav Defence and Indiabulls Real Estate were down 2-5% on profit bookings.

“Most infrastructure stocks have run up significantly on the road, power, EPC players, port companies, as well as companies on the railway side. This, in anticipation of budget announcements. So in the short term there could be neutral to negative reactions given that the run up has already been factored-in,” said Vinay Khattar, Associate Director & Head of Research – Edelweiss.

But in the long term, a number of stocks could be multi-baggers even at the levels that they are in, and hence when one invests in any of these stocks or sectors, it should be with a 3-5 year view. The story from that period of time frame looks extremely compelling, adds Vinay Khattar.

Nifty Futures

niftyfutures.org@imediaone.com

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