The Indian equity benchmarks surged on Tuesday as investor sentiment got a boost after the government expanded its capital expenditure plan for next financial year and laid out plan to increase spending on infrastructure to affordable housing to put growth on a firmer footing as the economy recovers from the pandemic. The Sensex rose as much as 1,018 points and Nifty 50 index touched an intraday high of 17,622.
The Sensex advanced 848 points to close at 58,863 and Nifty 50 index jumped 237 points or 1.4 per cent to settle at 17,577.
Finance Minister Nirmala Sitharaman on Tuesday announced Gati Shakti master plan for infrastructure development, hike in capital expenditure, expansion of national highway network by 25,000 kilometers and a master plan for expressways to boost economic growth for next financial year. Sitharaman also announced that the Reserve Bank of India will launch digital currency based on blockchain technology.
“The government continued with its pro-growth measures along with some fiscal prudence where manufacturing is a key theme where the government put focus through a sharp increase in Capex. The growth in the manufacturing sector will have a domino effect on different sectors to generate growth and employment. There is no negative trigger, therefore, the market will like the budget and if global cues will remain supportive then we can see new highs in our market soon,” said Sunil Nyati, Managing Director of Swastika Investmart
Meanwhile, the country's fiscal deficit was projected to be higher at 6.9 per cent this fiscal as against 6.8 per cent estimated earlier, with Finance Minister Nirmala Sitharaman emphasising the need for stronger and sustainable growth through public investment.
The marginal rise in fiscal deficit for the current fiscal is against the expectations of the market and experts who expected slight decline in the numbers on the back rising tax collections.
"The fiscal deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is consistent with the broad path of fiscal consolidation announced by me last year to reach a fiscal deficit level below 4.5 per cent by 2025-26. While setting the fiscal deficit level in 2022-23, I am conscious of the need to nurture growth, through public investment, to become stronger and sustainable," Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2022-23 in Parliament, said on Tuesday.
Infrastructure related cement, metal, capital goods and real estate shares were in high demand during the session as government's plan to hike infra spending spurred buying in these shares. S&P BSE Metal index with gain of nearly 5 per cent was top sectoral gainer. Capital Goods, Realty, IT, Banking, FMCG and Basic Materials indices also jumped between 1.7-3.3 per cent.
Mid- and small-cap shares also witnessed buying interest as S&P BSE MidCap index and SmallCap indexes rose 1 per cent each.
Tata Steel was top Nifty gainer, the stock rose 7.5 per cent to close at Rs 1,166. Sun Pharma, IndusInd Bank, Shree Cements, Larsen &Toubro, Hindalco, JSW Steel, Britannia Industries, ITC, HCL Technologies, Titan, Adani Ports and ICICI Bank also rose between 3-4.5 per cent.
