Investors gain Rs 3 lakh crore as market cheers pro-growth Budget

Investor wealth rose by nearly Rs 3 lakh crore today after the Modi government unveiled Budget 2022 that aims to boost growth amid continued disruption from Covid-19 and rising inflation.

Market cap of BSE-listed firms climbed to Rs 267.40 lakh crore today against Rs 264.48 lakh crore in the previous session. This implies a rise of  Rs 2.92 lakh crore in investor wealth.

The push for higher investment on highways and affordable housing helped the Indian stock market to end higher for the second consecutive session.

Sensex ended 848 points higher at 58,862 and Nifty rose 237 points to 17,576.   During the session, Sensex zoomed 1,018 points to hit a high of 59,032.

Nifty too moved 283 points higher intra day to 17,622 against the previous close today.

However, indices pared all gains after the Budget speech for a brief period.

Budget 2022: Sensex rises 848 points, Nifty ends at 17,576; Tata Steel, Sun Pharma top gainers

Sensex slumped 1,295 points from high point of the day to 57,737, Nifty too lost 378 points to 17,244 and traded in the red for a while.

Experts cited the weakness in European markets behind the market's knee-jerk reaction after the Budget.

Amol Athawale, Deputy Vice President, Technical Research, Kotak Securities said, "It was the weak European markets opening that dampened the sentiment and triggered a late bout of selective profit-taking. The persisting selling by the FIIs has been a worrying factor, which has led to a steep fall in recent weeks. Any escalation in the geo-political tensions and rising oil prices can further worsen the sentiment. After a long time, the Nifty closed below the 50 day SMA and has also formed a bearish candle on weekly charts, which is negative for the markets."

The crash was quickly bought into with the indices recovering a majority of their losses during the fag end of the session. The stock indices managed to close with massive gains amid the pro-growth stance of the Modi government in the Union Budget today.

The government has raised capital expenditure target to Rs 7.5 lakh crore from Rs 5.5 lakh crore in the last Budget for FY23.

"The outlay for capital expenditure in the Union Budget is being stepped up sharply by 35.4 per cent from Rs 5.54 lakh crore in the current year to Rs 7.50 lakh crore in 2022-23," Sitharaman said.

Jaideep Hansraj, MD & CEO, Kotak Securities said, "The kind of focus put on infrastructure in this budget is extremely positive. The heart of economic growth is going to be infrastructure. Kudos to the finance minister for presenting a progressive growth-oriented Budget."

With today's close, Sensex has gained 1,661 points in two sessions. Similarly, Nifty has surged 474 points this week. Analysts are positive on the direction the stock market is likely to take after the Union Budget today.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, "On daily charts, the market maintained an uptrend continuation formation and after a long time, it succeeded to close above the 50-day simple moving average which is broadly positive. For the day short-term traders, 17,400 and 17,250 would be key support levels to watch out for. Above the same, the Nifty would touch the level of 17750-17850. However, if the index slips below 17500, a quick intraday correction could drag down the index up to 17400-17350 levels."

Nagaraj Shetti, Technical Research Analyst at HDFC Securities said, "The short-term trend of Nifty continues to be positive with high volatility. The upside momentum seems to have strengthened in the last few sessions and this could be continued in coming sessions. The next upside levels to be watched around 17800-17900 levels in the near term. Immediate support is placed at 17460 levels."