Mkts give thumbs up to Budget; Sensex soars 434 points
In highly volatile trade, the BSE benchmark Sensex today erased initial losses and jumped over 434 points after Finance Minister Arun Jaitley
Mumbai: In highly volatile trade, the BSE benchmark Sensex today erased initial losses and jumped over 434 points after Finance Minister Arun Jaitley in his maiden Union Budget announced steps to strengthen investor confidence, improve fiscal situation and boost growth.
All the sectoral indices, led by realty, power and metal sectors, were trading in the green on emergence of buying driven by budgetary proposals.
After slumping over 300 points at around noon, the 30-share benchmark Sensex was trading higher by 434.23 points, or 1.71 per cent, at 25,879.04. Intra-day, the index has swung nearly 665 points as investors resorted to alternative bouts of buying and selling.
The broad-based National Stock Exchange index Nifty regained 7,700 point mark by surging 125.15 points, or 1.65 per cent to 7,710.15 point after shuttling between 7,713.45 and 7,479.05.
Atul Kumar, Head-Equity Funds ,Quantum AMC said: “Plan to reduce the fiscal deficit gradually to 3 per cent which is good for economic health. The focus of the budget has been on increasing manufacturing activity, agri growth and controlling inflation through investment in storage. There is also an intention in simplifying taxes aimed at attracting FDI…”
Experts also hailed Jaitley’s announcements on tax front.
“The announcement that the government will not introduce any retro amendment and mechanism to issue clarification on grey areas will certainly go a long way to bring clarity and certainty on such issues and reduce tax litigation,” said Rahul Garg, Leader Direct Tax, PwC India.
Jaitley also said income arising from transaction in securities to Foreign Portfolio Investors (FPIs), who have invested about USD 130 billion in India, will be treated as capital gains. This also triggered buying, traders said.
The Finance Minister proposed to set up Infrastructure Investment Trust to finance infra projects. Besides, proposed raising Foreign Direct Investment limit to 49 per cent in insurance through FIPB route. Budgetary proposals of custom duty relief to imported coal, also bolstered the sentiments, brokers said.