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Sunday, February 28, 2021

Budget 2021 Market Highlights: Dalal Street cheers Budget 2021 as Sensex surges 2,315 points, Nifty settles at 14,281

Share Market Budget 2021 Highlights: Everything that happened in the stock markets.

Written by Debashish Pachal | New Delhi |
Updated: February 1, 2021 6:38:43 pm
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Budget 2021 Share Market Highlights: The benchmark equity indices registered their biggest Budget day gains (in absolute terms) on Monday, settling around 5 per cent higher following Finance Minister Nirmala Sitharaman’s presentation of Union Budget 2021.

The S&P BSE Sensex rallied 2,314.84 points (5.00 per cent) to settle at 48,600.61, while the broader Nifty 50 ended at 14,281.20, rising by 646.60 points (4.74 per cent).

Follow Budget 2021 LIVE updates

Investors reacted to the proposals of the Union Budget 2021 which were presented by the finance minister in the Parliament earlier today. She announced various schemes across the healthcare, auto and infrastructure and agriculture sectors in her speech.

Live Blog

Finance Minister Nirmala Sitharaman will present the Union Budget 2021 in the Parliament today, the stock market will react to the proposals she announces on the floor of the house. Watch this space for all the happenings in the market today. Also, follow our other live blogs on Income Tax, Budget 2021

16:58 (IST)01 Feb 2021
MARKET QUOTE | Deepak Jasani, Head of Retail Research at HDFC Securities on today's market performance

"Indian benchmark equity indices broke the six-day losing streak as markets cheered the Union Budget 2021 presented by the FM in Loksabha on Feb 01 even as she spelled out the Modi government's plan for economic recovery. At close, the Nifty was up 646.60 points or 4.74% at 14281.20. The Sensex registered the best Budget day gains since 1997.

Volumes on the NSE were expectedly high on the Budget day. Except pharma, other sectoral indices ended with a gain of 1-8 percent. Broad market indices - BSE Midcap and Smallcap rose 2-3 percent. Markets felt that the Banks, Infrastructure, Materials and Metals sector could be benefitted by the privatization and spending thrust in the Union Budget.

Asian stock markets gained Monday after coronavirus vaccine maker AstraZeneca agreed to increase supplies to Europe amid rising worries about the disease. European stocks advanced on Monday, echoing positive market sentiment elsewhere.

India’s manufacturing industry started the year 2021 on a strong note with Manufacturing Purchasing Managers Index (PMI) for the month of January at 57.7, reflecting the strongest improvement in three months. Manufacturing PMI in December 2020 and November 2020 came in at 56.4 and 56.3, respectively.

Nifty has reversed the latest downtrend swiftly due to the Budget provisions. Reaction of the FPIs to the Budget provisions will be keenly watched and if they don't seem to mind the large absolute fiscal deficit numbers, large Govt borrowing numbers and delay in achieving the 3% fiscal deficit targets, this upward momentum can continue. 14378-14471 could be the next band of resistance for the Nifty and in case this is breached a move towards the earlier high of 14754 can be seen."

16:44 (IST)01 Feb 2021
MARKET QUOTE | Vinod Nair, Head of Research at Geojit Financial Services on Budget Day's market rally:

"The Union Budget 2021 is a boon for the equity market with all the essential aspects of growth supported by an increase in government spending without an increase in indirect taxes. Proposal for the privatisation of 2 PSU banks and measures to curb the impact of NPAs helped the banking index to lead the soaring rally. Higher government spending in Infrastructure and increased FDI limit in Insurance improved the overall outlook of these sectors. Although Cess can have a marginal impact on the related sectors, the budget provides incentives to generate wealth in the economy without providing a high burden on households and private sectors"

15:44 (IST)01 Feb 2021
Gainers and losers on Sensex

IndusInd Bank, ICICI Bank, Bajaj Finserv, State Bank of India (SBI), Larsen & Toubro (L&T) and Housing Development Finance Corporation (HDFC) were the biggest gainers on the Budget day.

Just three stocks ended in the red.

Source: BSE
15:36 (IST)01 Feb 2021
Equity markets at close

The S&P BSE Sensex settled at 48,600.61, rallying by 2,314.84 points (5.0 per cent), while the Nifty 50 surged 646.60 points (4.74 per cent) to end at 14,281.20.

15:31 (IST)01 Feb 2021
FM Sitharaman at post Budget 2021 Press Conference

  • Finance Minister Nirmala Sitharaman: Accounting of govt expenditure, revenues far more transparent.
  • We ensured spending wont get delayed.

15:24 (IST)01 Feb 2021
FM Sitharaman at post Budget 2021 Press Conference | Decided to spend big on infra

  • Finance Minister Nirmala Sitharaman: We decided to spend big on Infrastructure in this Budget.
  • Attended to the need of the health sector
  • Decided to give greater impetus to the economy

15:14 (IST)01 Feb 2021
Full text of Finance Minister Nirmala Sitharaman’s speech

Finance Minister Nirmala Sitharaman has presented the Union Budget 2021-22 in Parliament. In significant changes to the taxation process, Sitharaman announced the scrapping of income tax for senior citizens under certain conditions, new rules for removal of double taxation for NRIs, and a reduction in the time period of tax assessments among other measures. Click here to read her entire speech

15:02 (IST)01 Feb 2021
Experts speak| Uday Kotak, MD at Kotak Mahindra Bank reacts to Union Budget 2021:
14:45 (IST)01 Feb 2021
Budget 2021: Rs 35,000 crore allotted for Covid-19 vaccines

Finance Minister Nirmala Sitharaman allotted Rs 35,000 crore for coronavirus vaccines in the country as part of the newly launched Aaatmanirbhar Swasth Bharat Yojana.

"A new centrally sponsored scheme PM Atmanirbhar Swasth Bharat Yojana will be launched with an outlay of about 64,180 crores over 6 years," Finance Minister Sitharaman said during her speech while presenting the Union Budget 2021-22 in the Parliament on Monday. Click here to read

14:38 (IST)01 Feb 2021
Yashish Dahiya, Co-founder & Group CEO at Policybazaar.com reacts to Union Budget 2020:

"This year's Union budget presented by Finance Minister Nirmala Sitharaman was a step towards building a $5 trillion economy. The primary focus of this year’s budget speech was the healthcare sector for which the government has allocated an outlay of Rs 64,180 crores over six years. This was much needed considering the once-in-a-century global pandemic that the nation is currently braving. The FM has even proposed an increase in the foreign direct investment limit in insurance from 49% to 74% – a long-standing ask of the Indian insurance industry. There has always been a strong relationship between foreign investment and economic growth and to achieve the current economic target, a larger inflow of investment is much needed. Expanding FDI is a revolutionary move as it will not only help in capital infusion but will also be beneficial in increasing the insurance penetration rate in India. It will also provide room for more players in the market, thus increasing competition and choice of products to choose from. For customers, higher spend on the healthcare industry means more investment in tech-based customer services and innovative insurance products for overall protection."

14:25 (IST)01 Feb 2021
Amar Ambani, Senior President & Institutional Research Head at YES Securities reacts to union Budget 2021:

"The Budget rightly decided to focus on economic growth by raising expenditure and allowing for a wider fiscal deficit in these pandemic times. Importantly, spending on capital expenditure is far higher at 2.5% of GDP vis-à-vis 1.7% last year, a move in the right direction. Domestic manufacturing is going to be a big growth engine with previous corporate tax reductions, correction of inverted duty structures and a lot more subsidy to come on the PLI front.
 
Besides the widely expected allocation increases to housing, infrastructure, health and textiles, the move to curb prolonged tax scrutiny and firm mindset shown to privatise certain PSUs, creation of ARCs for bad loans and monetise government land banks are steps in the right direction.
 
What appealed most to the stock market was the absence of moves like wealth tax or an increase in LTCG on equity investments. Unless there are any devils in the fine print, the Budget has been kept simple and played the right cards.

However, bond yields are bound to harden given the extended borrowing programme of the government and inflationary expansion in the budget."

14:05 (IST)01 Feb 2021
Market update: Sensex trades over 1,900 points

Here's how the key BSE indices were performing at 2:01 pm:

Source: BSE
13:48 (IST)01 Feb 2021
Deepthi Mathew, Economist at Geojit Financial Services reacts to Union Budget 2021:

"Budget called for increased government spending to revive the economy. There was an infrastructure push in the budget, focussing on development finance institution and asset monetization to fund the infra projects. Privatization of PSBs was another bold announcement. Positively, there wasn’t any increase in taxes, even when the fiscal deficit figures are projected at a higher range."

13:45 (IST)01 Feb 2021
Explained: What top Budget 2021 proposals are trying to do

Finance Minister Nirmala Sitharaman proposed many new measures in Budget 2021 to prop up the flagging economy amid the Covid-19 pandemic and boost spending across sectors. Here is what the top proposals entail. Click here to read

13:41 (IST)01 Feb 2021
Krishna Kumar Karwa, Managing Director at Emkay Global Financial Services reacts to Union Budget 2021:

"Hats off to the FM for sticking to her promise of a budget that will be remembered for 100 years. A budget with no changes in Direct taxes will certainly be remembered for years to come. Equity market will be enthused with no tinkering in capital gains taxes or STT or any form of Covid tax. The proposals to privatize 2 PSBs and 1 general insurance co is noteworthy as is the increase in FDI limit in Insurance to 74%. The much-awaited proposal to set up a DFI should boost CAPEX in the coming years. To summarise the revival in the economy seen in the last 4-5 months will be further enhanced with the various budget proposals. Tax buoyancy, successful divestments and quick monetization of operating infrastructure assets remain a key to achieving the fiscal deficit target of 6.8 % for Fy 21-22."

13:33 (IST)01 Feb 2021
Anuj Puri, Chairman at ANAROCK Property Consultants reacts on Budget 2021:

"As expected, healthcare got the highest priority in resource allocation and policy support including Rs 64,180 crore outlay under PM Aatmanirbhar Swastha Bharat scheme. It bodes well for healthcare facilities and wellness-oriented real estate.

Further, FY 2021-22 capital expenditure outlay at Rs 5.54 lakh crore to ensure that the target of becoming a USD 5 trillion economy by 2025 is well on track. This will positively impact infrastructure, connectivity of Tier II cities, and job creation for SMEs and MSMEs – thereby benefitting the target customers of affordable housing.

For the ‘Aam Aadmi,’ personal tax relief by way of tax rate cuts or favourably readjusted tax slabs topped demand and the FM failed to deliver on it. An upward revision in the deduction limit under Section 80C (at INR 1.5 lakh a year) was long overdue and increasing this limit would have increased disposable incomes, inevitably pushing up consumption. It would have also helped improve consumer sentiments across sectors – the real need of the hour.

As anticipated, affordable housing and rental housing got a big boost with the govt. extending the period for extra deduction of Rs 1.5 lakh available for loans up to 31st March 2022. This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment. As per ANAROCK Research, affordable housing already accounts for more than 35% of the supply across the top 7 cities in the country.

Infrastructure got a major push. Infra works proposed include building 8,500-km of highways by March 2022. There were big infra sops announced for poll-bound states including West Bengal, Tamil Nadu, Kerala and Assam. The govt. also announced the Bill to set up Development Finance Institution (DFI) providing Rs 20,000 crore to boost infrastructure projects. The Modi government has not lost sight of its USP of infra creation, which will help connect more areas and thus open them up for real estate development.

Customs duty on steel reduced to 7.5% will create some space to real estate developers who may not be in a position to increase prices immediately.

The announcement to set up 7 mega textile parks with plug-and-play facility in 3 years will unlock the potential of new markets for development and provide an impetus to real estate assets, including logistics and warehousing.

Post the pandemic, the chances of NPAs growing are significantly high. The Budget announced the setting up of ARCs to help banks to cushion the impact of the pandemic. Besides the setting up the long-awaited bad bank, the government will also infuse INR 20,000 crore into public sector banks as part of its recapitalisation plan.

All in all, the budget was broad-based with special emphasis on building robust healthcare infrastructure, physical infrastructure and affordable housing. It will result in job creation in the informal sector, which was severely impacted by the pandemic. Creating buoyancy in the job market will benefit the Indian economy in the long run. The focus on rural job creation will also give a boost to affordable housing, which will help increase housing demand in tier 2 & 3 cities."

13:23 (IST)01 Feb 2021
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services reacts to Union Budget 2021:

"This is indeed a bold growth-oriented budget. Absence of the much-feared Covid tax and the surcharges on Income Tax is a great relief. Privatization of 2 nationalised banks and proposal of monetization of assets like land are clear positives. Raising FDI in insurance from 49% to 74% is welcome. Market response to the budget reflects growth optimism. In brief, the FM has presented a pragmatic, bold and visionary budget in these difficult times"

13:08 (IST)01 Feb 2021
Market update: Sensex trades over 1,600 points

Sensex extends its gains as Finance Minister Nirmala Sitharaman concluded her Union Budget 2021 speech.

Source: BSE
12:50 (IST)01 Feb 2021
Budget 2021: Govt proposes Securities Market Code

The securities mkt code will include Sebi Act, Govt Securities Act and Depositories Act

12:40 (IST)01 Feb 2021
Budget 2021: 100 more districts to be added under city gas expansion

BSE Oil & Gas reacts:

BSE Oil and Gas index at 12:34 pm. (Source: BSE)

Finance Minister Nirmala Sitharaman will deliver her budget like "never before" that is expected to provide relief to the pandemic-hit economy and is likely to focus on driving the recovery through higher spending on healthcare, infrastructure and defence.

On Friday, the Sensex had crashed 588.59 points (1.26 per cent) to finish at 46,285.77 -- taking the six-session aggregate loss to 3,506.35 points (7.04 per cent). Likewise, the Nifty furthered its loss by 182.95 points (1.32 per cent) to settle at 13,634.60. Over the last six days, the NSE benchmark has shed 1,010.10 points (6.89 per cent).