Sensex rallies over 1,000 points on Budget day; here’s what analysts have to say

Investors on Dalal Street gave thumbs up to the Union Budget 2023 as a couple of announcements related to income tax sops, huge increase in infrastructure spending and a rise in capital expenditure lifted the market mood on February 1 after witnessing heavy selling pressure in January. Market watchers also believe that no change in capital gains, as feared by the market, has also been a big relief. The benchmark BSE Sensex, which tanked 2 per cent last month, traded over 1,000 points higher at 60,583 at around 1.20 pm (IST). On the other hand, the NSE Nifty index was up 235 points at 17,889 at around the same time. Analysts and market experts believe that the budget has laid a roadmap for India to lead the world for decades to come. Here’s what they have to say:

Lakshmi Iyer, CEO-Investment Advisory, Kotak Investment Advisors:

India budget 2023 has offered a multi-dimensional view. The 3 Cs which stand out are - Capex increase, consumption boost and capital gains tax status quo. Clearly, it is a bull’s-eye budget satisfying most strata of the society and of course thumbs up from the market as well.

Nikunj Doshi, Managing Partner and Co-Founder, Bay Capital Investment Advisors

The Budget has announced several measures to pass on the benefits of economic development to the poorest people. Huge increase in infra spend, boost to tourism, ease of doing business, green growth etc are the measures to accelerate the growth of the economy. No change in capital gains, as feared by the market, has been a big relief. Overall, the Budget has laid a roadmap for India to lead the world for decades to come.

Anmol Das, Head of Research, Teji Mandi

The FM scored in both the economic expansion line as well as relieving the common man with higher personal disposable income in hand. This budget enables domestic consumption growth while boosting business and investment sentiment for corporates.

Suman Chowdhury, Executive Director & Chief Analytical Officer, Acuité Ratings & Research

The rationalisation of the personal income tax structure is expected to lead to two things (i) raise disposable incomes for the middle class and particularly younger taxpayers (ii) transition the taxpayers to the new tax regime with minimal exemptions and lower and simpler tax slabs. This is expected to give a moderate boost to domestic consumption.

S Ranganathan, Head of Research, LKP Securities

In keeping with its focus on inclusive growth, the Union Budget has hiked outlays on Infrastructure and Agriculture which in our view would have a force multiplier impact on the economy. Increased outlay towards energy transition, railways, affordable housing and urban infrastructure indicate GOI resolve on enablers for growth. Fiscal Deficit estimated at 5.9 per cent of GDP meets street expectations on fiscal prudence. The Budget has put more money in the hands of the people through relief from income tax which to our mind is a very positive step. Budget leaving taxation on capital gains untouched is a big positive. LKP Securities rates the Union Budget 9/10.

Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One

The market seems to have given thumbs up to the budget. We have already managed to reclaim the 17,800 mark, which was compromised last Friday. Now today’s close would be quite crucial. If Nifty manages to stay above 18,000, we should brace ourselves for a strong rally in the coming days.

Anand Rathi, Founder & Chairman, Anand Rathi Group

A 33 per cent increase in capital expenditure to Rs 10 lakh crore, the highest ever will go a long way in building roads, ports, and airports--crucial for making India a reliable investment destination. Investment of Rs 2.4 lakh crore in railways is commendable. Boost to capex before the national polls is an indication Modi is focused on realising his dream of making India a factory for the world.

The gross borrowing estimate of Rs 15.43 lakh crore for next year is lower than the survey estimates of Rs 15.77 lakh crore. Hopefully, that should cheer the bond markets. Net borrowing at 12.3 trillion rupees, however, is higher than the estimate. Need to see how much of that could be raised via green bonds.

India’s maiden sovereign green bond issuance last month fetched a better-than-expected yield and the next tranche is planned for February 9.

FM has reduced the fiscal deficit target to 5.9 per cent for FY23-24, which is a welcome move and should help in maintaining the interest rate lower.

Also read: Bulls back in action! Sensex zooms over 1200 pts post Budget 2023

Also read: Sensex, Nifty rally: 5 reasons why investors are cheering Union Budget 2023 announcements