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Budget 2022 Market Highlights: Dalal Street cheers Union Budget as Sensex climbs 848 points, Nifty settles at 17,577

Share Market Budget 2022 Highlights: The S&P BSE Sensex ended at 58,862.57, up 848.40 points (1.46 per cent), while the Nifty 50 settled at 17,576.85, up 237.00 points (1.37 per cent).

Written by Debashish Pachal | New Delhi |
Updated: February 1, 2022 7:45:51 pm
Stock Market Today, Share Market Today, Sensex, Nifty, Rupee ValueA man looks at a screen displaying budget news, in Mumbai on Tuesday. (Photo: Reuters)

Budget 2022 Share Market Highlights: The benchmark equity indices on the BSE and National Stock Exchange (NSE) ended nearly 1.5 per cent higher following a volatile session of trade on the Budget day as market participants reacted positively to the big infrastructure boost in the Budget 2022 delivered by Finance Minister Nirmala Sitharaman.

The S&P BSE Sensex rose 848.40 points (1.46 per cent) to settle at 58,862.57 while the Nifty 50 climbed 237.00 points (1.37 per cent) to end at 17,576.85. Earlier in the day both the indices opened over 0.8 per cent higher and rose around 1.7 per cent with the Sensex hitting a high of 59,032.20 and Nifty touching 17,622.40 during the FM’s budget speech.

Finance Minister Nirmala Sitharaman delivered her fourth union budget today (February 1, 2022) where she made several key announcements from announcing  RBI-issued Digital Rupee to capital expenditure allocation around Rs 10.68 lakh crore. Our editors explain all that was announced in Budget 2022.

Live Blog

Finance Minister Nirmala Sitharaman presented the Union Budget 2022 in the Parliament today and the stock market reacted positively to the proposals she is announced on the floor of the house. Here's everything that happened in the stock market today. Also, follow our special live blogs on Budget 2022. and Budget 2022 Explained.

19:24 (IST)01 Feb 2022
Budget 2022 Reaction | Ravi Singh, VP and Head of Research at Share India Securities

"As expected the budget 2022 was focused around the steps to revive the economy by providing productive spending and subsidies. Market participants reacted positively to the big infrastructure boost in the Budget. The most beneficial sectors are Banking, Infra, realty, capital goods, Healthcare and fertilizer. The expectations of higher corporate earnings are also favourable for growth. Basically, there was no major negative in the budget, which is why markets have welcomed it with a good rise. However, in this process of enhanced spending,  government has not addressed the concern related to inflation which may prove to be the major bottleneck in economic recovery worldwide."

19:21 (IST)01 Feb 2022
Budget 2022 Reaction | Krishna Kumar Karwa, Managing Director at Emkay Global Financial Services

"FM’s speech was the shortest of all her budget speeches and possibly with the maximum impact. Despite the temptation to go populist with so many state elections lined up – the FM stuck to the script without playing to the gallery. A key highlight of the budget is the enhanced thrust on capex rising to almost 2.9% of the GDP acknowledging the fact that the Private sector capex has still to kick in.

The provision to tax gains on transfer of digital assets is a very pragmatic move and acknowledgment that digital assets are not going away – might as well embrace them. The intention to have a digital rupee is a far-sighted move whose positive impact will be felt over time. The thrust on new generation tools and technologies to take the country forward was pretty evident with various provisions to leverage digital technologies and drones, among others to digitize land records.

The intention to allow Income-tax Payers to revise their  IT returns for 2 years post the end of the relevant assessment year to account for understated income should go a long way in increased compliance and reduced litigation . Respect and Trust for the Tax Payer is clearly evident in this provision . Could the FM have done more by way of direct relief to the marginal taxpayer – possibly yes.

Like the previous budget, the FM has been conservative on the tax receipts and very realistic on the overall fiscal deficit. The divestment target at 65000 crores should be easily achievable. From a capital market perspective a neutral budget. Like always the challenge is in execution. Let’s hope the execution is at par with the intentions and thrust of an excellent budget."

17:47 (IST)01 Feb 2022
Budget 2022 Reaction | Motilal Oswal, MD & CEO at Motilal Oswal Financial Services

"The writing was there on the wall. Any sudden and sharp fiscal consolidation steps announced could have throttled the nascent and uneven recovery of the Indian Economy. A 6.9pct fiscal deficit target alleviates that pain. The successive waves of the pandemic have made it more difficult to reduce government debt as a share of GDP in the medium term. The budget has focused on boosting overall demand though and has invested more in infrastructure. 

Hence as I see it, we are in high growth, high inflation environment. The budget is behind us and now 9th Februrary’22 become relevant. The commentary around RBI raising rates in its coming meeting would be that much more relevant. Having said that, in my opinion, equity markets in India are likely to see 20000 on the nifty and about 65000 in SENSEX by December 2022 on the back of 15-20 per cent earnings growth in FY23. The journey, however, is likely to be very volatile.  Markets will test patience on the downside as markets adjust to higher risk premiums on the back of an impending increase in interest rates, both globally and locally. The Indian rupee is likely to depreciate which could see FII selling, particularly those names where private equity holding is high (Read consumer tech and other self-proclaimed tech companies). Sectors like infrastructure , real estate , industrials , financials ,Information technology and  pharmaceuticals are likely to outperform while consumer staples and discretionary likely to underperform"

17:44 (IST)01 Feb 2022
Budget 2022 Reaction | Nish Bhatt, Founder and CEO at Millwood Kane International

"The government has spelled out its priorities very clear. The higher capex and thrust on infra are required to keep the growth rate high. Though there may be some concerns on a higher deficit, that is entirely for the development of key infra projects. The Make in India thrust along with a focus on infra will create the required number of new jobs for various age brackets.

Rs 48,000 cr allocation to build 80 lakh affordable homes is a big booster for the real estate sector. The focus on EV charging infra and urban planning will complement real estate further.

Robust execution of the budget plans, no further COVID waves, and crude trading in a favorable range will be key to the market and economy going forward."

17:42 (IST)01 Feb 2022
Budget 2022 Reaction | George Alexander Muthoot, MD at Muthoot Finance

"The 2022-23 budget has laid clear emphasis on prioritising economic growth with focus on capital spending to generate growth and employment. The announcement relating to MSMEs and thrust on digital banking will further go a long way in supporting the economy. The MSME sector has been one of the most impacted during the pandemic. Focusing on further supporting the MSME sector and reduce stress in this segment, the Government has widened the ECLGS scheme & revamped CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises).The ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore. The CGTMSE scheme will be revamped with required infusion of funds. This will facilitate additional credit of Rs 2 lakh crore for MSMEs and expand employment opportunities. We believe that the NBFC sector will also benefit from the allocation of Rs. 48,000 cr (under the PM Awas Yojana) for affordable housing unveiled by the honourable Finance Minister during the budget announcement. This move will accelerate the credit demand in the economy and positively affect the performance of NBFCs catering to the sector."

17:03 (IST)01 Feb 2022
Budget 2022 Reaction | Varun Sridhar, CEO at Paytm Money

"Accelerated investments into core sectors that have a big multiplier effect on GDP, coupled with a focus on job creation, skill development and facilitating digitally enabled financial inclusion summarises the Union Budget. Stability in the tax regime is also commendable as it makes investments predictable. The Government has also opened doors for digital currency and its different uses making the budget historic for the financial services sector."

16:59 (IST)01 Feb 2022
Budget 2022 Reaction | Amar Ambani, Senior President and Head – Institutional Equities at YES SECURITIES

"In terms of economic support, especially on infrastructure and taxation fronts, the Union Budget 2022 has delivered along expected lines. The only material deviation happened on the fiscal deficit front, a 6.9% projected deficit for FY23, 100 basis points higher than what we anticipated. Precisely why bond yields reacted strongly, rising by over 17 basis to touch 6.85 per cent. We do sense some scope in shoring up receipts through higher divestment, than what the budget has estimated at Rs650 bn for FY23. With Air India out of the way, and given the government’s long divestment pipeline, this could help the reduce the fiscal deficit. There is also scope for higher revenue through tax collection, if Covid does not disrupt the trajectory in FY23.

The FM has rightly focused on doing the heavy lifting by raising capex levels and investments in infrastructure. Even after accounting for spends through IEBR, the consolidated capital expenditure is stated to rise by 15%, which is heartening. To put it in context, the gross budgetary support of Rs 7.5 lakh crore will likely be 19% of total expenditure versus range of 12-13% in last six years. While it is not rising as a percentage of GDP, it is on the right path.

A major positive was the status quo on taxation, especially direct taxes. Given that the government has witnessed bumper collections on the direct tax front, as well as on the GST front, the need of the hour was to not tinker with rates. The Finance Minister's gesture was applauded by the stock market.

While the key always lies in execution, we note several key strides around renewables, for a more digital economy, expected ECLGS scheme extension for MSMEs, more 'atmanirbhar' defence, more allocations to PLI schemes, and cuts in input duties for Refining industry and Gems and Jewellery.

No negative, it is said, is a big positive. Given a growth supportive budget, our conviction is higher for another strong year for equities. We continue to bet on a structural rise in consumption in India, and a boost to the ongoing 'unorganized to organized' trend. With the accelerated digital supercycle and strengthened corporate balance sheets, coupled with a benign period for cost of capital, we expect Indian equities to close 2022 on a higher high compared to 2021."

16:54 (IST)01 Feb 2022
Budget 2022 Reaction | Shachindra Nath, Executive Chairman and MD at U GRO Capital

"Hon’ble Finance Minister today announced an encouraging set of measures, targeted towards rapid growth of MSME sector and the economy. The extension of ECLGS scheme by Rs 50,000 upto March 2023, with a special focus on ailing hospitality sector is crucial to facilitate its faster recovery.

The credit support has also been provided in the form of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) revamp with credit of Rs 2 lakh crore for micro and small enterprises. These initiatives will help financial institutions to mitigate risk and stimulate credit outreach to MSMEs.

The Government also announced inter-linking of Udyam, e-SHRAM, NCS & ASEEM portals and providing services such as credit facilitation and entrepreneurial opportunities. This will certainly aid in the MSME sector’s formalization and growth. The Government has time and again shown distinctive support to the country’s MSME sector and encouraged its contribution to the Atmanirbhar Bharat imperative.

The outlay of Rs 6,000 crore for programmes to accelerate MSME performance will surely assist in boosting the sector’s resilience and operational efficiency. Overall, the measures announced in Union Budget 2022-23 will unlock rapid recovery and holistic growth of the MSME sector."

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16:42 (IST)01 Feb 2022
Budget 2022 Reaction | Nimish Shah, Chief Investment Officer – Listed Investments at Waterfield Advisors

"Capex focused budget promises continuity of growth with an increase in capex by 35.4%. Would ensure GDP growth at above 8% in FY23 and nominal GDP to be around Rs.260 Lakh Crs / approx.  $3.5 trillion. While Fiscal math is worrying the bond markets with yields are up 15-20 bps, equity markets are in euphoria on the back of a budget that has shown credibility, continuity, and consistency. Capital gains taxation on Crypto / Digital Assets and introduction on Digital Rupee in 2022-23 brings about the intent of the government to regulate the space even before the Crypto Bill is tabled in the Parliament"

16:24 (IST)01 Feb 2022
MARKET QUOTE | Deepak Jasani, Head of Retail Research at HDFC Securities on budget day's market performance

"Nifty ended the Budget day (Feb 01) in the positive for the second consecutive session after a volatile trade. Nifty opened gap up, rose in the early part of the day to make an intra day top at 12 noon. Post the Budget speech, Nifty fell sharply to give up all the gains and go into negative territory. It then recovered sharply and ended the day close to the intra day high. At close Nifty was up 1.37% or 237 points to 17576.9.

On a day when the volumes on the NSE were subdued (considering the Budget presented during the day), Metals, Capital Goods, Realty, IT, Healthcare and FMCG indices rose the most while Auto and Oil & Gas indices fell the most. BSE Midcap index rose 1.08% while Smallcap index rose 0.92%.

World stocks started a new month on firmer ground as a slew of reassuring comments from Federal Reserve officials helped calm rate-hike jitters even asstrong US tech earnings lifted market mood soured by expectations of central bank rate rises. Australia's central bank ended the bond buying campaign as expected, but pushed back hard on market wagers for an early rate rise.

Nifty ended in the positive boosted by growth inducing measures of the Union Budget. Advance decline ratio also remained in the positive. Markets are enthused by the credible conservative estimates in the Budget. However high inflation and interest rates remain the two spoilsports. 17745-17805 could be the next resistance for the Nifty while 17374-17410 could be the support."

16:15 (IST)01 Feb 2022
Rupee slips 17 paise to close at 74.82 against US dollar

The rupee pared its initial gains and settled 17 paise lower at 74.82 (provisional) against US dollar on Tuesday on the back of higher-than-expected borrowing in the next financial year.

Investors were cautious after Finance Minister Nirmala Sitharaman on Tuesday said that the government will borrow about Rs 11.6 lakh crore from the market in 2022-23 to meet its expenditure requirement, forex traders said. Further, the govt said fiscal deficit in 2021-22 will be 6.9 per cent of GDP and 6.4 per cent in 2022-23, and this also weighed on sentiments.

At the interbank foreign exchange, the rupee opened at 74.53 against the American dollar, witnessed an intra-day high of 74.41 and a low of 74.87 against the greenback. The local unit finally ended the day at 74.82, 17 paise lower than its previous close of 74.65.

(PTI)

16:07 (IST)01 Feb 2022
MARKET QUOTE | Vinod Nair, Head of Research at Geojit Financial Services on Budget Day gains

"It is a long-term growth oriented budget which the market has welcomed given no headroom for cautiousness & populist measures. It is expected to support growth in the future; however, it is missing some balancing measures in context of current inflationary & slowing economy. Supportive measures were needed for rural, agriculture, low taxpayers & for sectors impacted by the pandemic. High capex, fiscal deficit  & borrowing plans in the background of a high inflation, commodity & oil prices and rising interest rates will be challenges in the short to medium-term."

16:05 (IST)01 Feb 2022
Gainers and losers on Sensex

Tata Steel, Sun Pharma, IndusInd Bank, Larsen & Toubro (L&T), Ultratech Cement and ITC were the top gainers of the day while M&M, Power Grid, SBI, Bharti Airtel, NTPC and Maruti Suzuki India were the top laggards.

Source: BSE
15:36 (IST)01 Feb 2022
Equity markets at close

The S&P BSE Sensex settled at 58,862.57, climbing 848.40 points (1.46 per cent), while the Nifty 50 gained 237.00 points (1.37 per cent) to end at 17,576.85.

15:29 (IST)01 Feb 2022
Tata Motors January sales up 27% at 76,210 units

Tata Motors reported a 27 per cent on-year rise in its total sales at 76,210 units in January 2022. The automaker's total sales last year was 59,866 vehicles.

Total domestic sales inched up 26 per cent at 72,485 units last month up from 57,649 vehicles year ago, Tata Motors said in a statement.

15:25 (IST)01 Feb 2022
Budget 2022 Reaction | S Ranganathan, Head of Research at LKP Securities

"A pro-India budget with huge capex thrust that will have a multiplier effect coupled with a big tech push and productivity boost through digital infrastructure. The budget ushered in a paradigm change towards housing and urban development while using the fiscal space created out of buoyant tax collections towards financial inclusion"

15:22 (IST)01 Feb 2022
Budget 2022 Reaction | Rajee R, Chief Ratings Officer at Brickwork Ratings

"The growth-oriented Union Budget 2022-23  has buoyed overall sentiments and provided an ambitious blueprint for the next 25 years. Emphasis on infrastructure building through the PM Gati Shakti scheme, increase in outlay on capital expenditure by around 36% to Rs 7.50 lakh crore, infra spends in PPP mode, steps for urban capacity building, thrust on the digital ecosystem, support for start-up ecosystem, renewable energy, electric vehicles, chemical-free farming etc. are positive steps in steering the nation to India@100.

There is a good balancing act between fiscal consolidation and growth prioritisation. Extension of Emergency Credit Line Guarantee Scheme (ECLGS) scheme by a year to March 2023 and increase in outlay by Rs. 50,000 Crs. are welcome announcements, expected to significantly help the MSME sectors and the hospitality sector specifically, by aiding the sector’s financing needs. Emphasis on ‘inclusive development and ‘financing of investments’ would lead to rapid financial inclusion and extension of the credit ecosystem.

Earmarking 68% of the capital procurement budget of the defense sector for domestic industries is expected to sustain investments, attract fresh capacity creation and promote Atmanirbhar Bharat. Continued emphasis on the importance of mobile connectivity and broadband for economic development, especially in rural India, will certainly boost the telecommunication and associated sectors.

Ease of Doing Business 2.0 is a step in the right direction and the Single Window clearance mechanism will go a long way in this direction. The push on digital economy, fintech innovation and introduction of central bank digital currency are expected to give the much-needed thrust to a growing fintech sector. Amendments proposed in the Insolvency & Bankruptcy Code would enhance the resolution process's efficiency. BWR expects that the various announcements will have a  positive impact on the country’s growth agenda."

15:19 (IST)01 Feb 2022
Budget 2022 Reaction | Devang Mehta, Head – Equity Advisory at Centrum Wealth

"The equity markets were cheerful on the announcement of huge outlay of capital expenditure in overall infrastructure development. This Union budget will also lay the foundation for economic growth through public investments as India emerges from a pandemic induced slump. Measures announced for manufacturing, infra building including roads, highways, railways, renewable energy, MSMEs, farm sectors etc, if executed with diligence will go a long way in attracting private capex & lead to accelerated economic growth and of course robust earnings growth for India Inc. Also the fiscal outcome is more or less in line with street expectations & government has refrained from going on the path of sharp consolidation and opted for growth. Hardly any tinkering with tax & avoiding populist measures was also received well by the market participants. Some sectors which get a boost seem to be banking & financial services as a proxy for credit growth & capex, real estate proxy plays like building materials including cement, capital goods, automation, digital focused IT companies, technology, consumption."

15:17 (IST)01 Feb 2022
Budget 2022 Reaction | Ashish Gumashta, CEO at Julius Baer India

"The Union budget 2022-23 continued the focus on 'quality' expenditure and increased the capex by 35% which is ought to have a multiplier effect on the economy. Apart from public-private investments, clean energy focus is amply clear with additional allocation to Solar PLI and policy around battery swapping. 

Issuance of green bonds and promotion of GIFT great move to attract global investors.

On the consumption front, there is a bit of disappointment as there is no direct stimulus to spur growth and no major announcement on privatisation and the overall divestment targets are underwhelming.

Finally from taxation perspective, 'No news is good news'. Capital gains surcharge reduction for unlisted equity and debt is a positive development.

Overall it is a growth oriented budget and the financial numbers seems realistic (revenue nos for FY 22 are tad conservative). It has laid the roadmap for India to achieve sustainable growth in the years to come by delivering on key expectations."

15:11 (IST)01 Feb 2022
Budget 2022 Reaction | Dhiraj Relli, MD & CEO at HDFC Securities

"The Budget is growth-inducing and does the heavy lifting by sharply increasing capital expenditure. The focus on boosting manufacturing as well as an underlined emphasis on areas such as startups, modern mobility and clean energy, shows the FM has prioritised long-term growth. Individual taxpayers may feel a bit disappointed with the lack of direct tax cuts but this Budget lays the ground for a multi-year growth boom. The FY23 fiscal deficit has come in higher than expectations. Let’s hope the interest rates and inflation do not remain high for long."

The all-important Budget session had commenced on Monday following an address by President Ram Nath Kovind to both the houses of Parliament. The session will be held in two parts – the first part of the session would conclude on February 11, 2022. After a month-long recess, part two of the session would begin on March 14, 2022, and conclude on April 8, 2022.

On Monday, the topline equity indices on BSE and National Stock Exchange (NSE) surged nearly 1.5 per cent on account of intense buying across sectors after the Economic Survey 2021-22 projected a healthy growth for the economy in the near term.

The S&P BSE Sensex rose 813.94 points (1.42 per cent) to settle at 58,014.17 while the Nifty 50 climbed 237.90 points (1.39 per cent) to end at 17,339.85.

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First published on: 01-02-2022 at 08:11:36 am