The 50-share Nifty hit an all-time high of 9,006 as markets rallied for the fourth straight day on Budget optimism. The Nifty gained as much as 50 points at its day’s high, edging past its previous record high of 8,996.60, hit on January 30, 2015.
The Nifty has now gained around 300 points or over 3 per cent since Friday. The Sensex is up over 800 points in the last four sessions.
In his first full-year Budget, Mr Jaitley announced Rs 70,000 crore more to increase spending on the country’s infrastructure, a step likely to kick start the investment cycle and put the economy back on track. He also promised lower-than-expected borrowing despite raising the fiscal deficit target.
Mr Jaitley’s proposal to cut corporate tax rate from 30 per cent to 25 per cent over four years is likely to increase profitability of companies, analysts say.
The finance minister also announced several measures to woo foreign investors, who have been the backbone of the current rally that has seen Indian stocks outperform most emerging markets. He deferred the dreaded General Anti Avoidance Rule (GAAR) by two years and also proposed to extend a concessionary rate of 5 per cent for so-called withholding taxes on debt investments by foreign investors by two years, until July 1, 2017.
(Read: Budget Woos Foreign Investors With Tax Incentives)
Tuesday’s rally, however, was driven by Reliance Industries, one of the most influential stocks in the Nifty. RIL shares gained nearly 4.4 per cent after CLSA said the conglomerate could report a record profit for the fourth quarter. (Read here)
IT stocks such as Tata Consultancy Services also rallied sharply to push Nifty higher. TCS gained nearly 4 per cent.
The Nifty ended nearly 40 points higher at 8,996, which is also a new closing high for the index. The Sensex rose 134 points to 29,593.