Market wrap: Bulls cheer Budget 2022; Sensex, Nifty end 1.4% higher

Top headlines
 
·       Bulls cheer Budget 2022; Sensex ends 848 pts higher, Nifty above 17,550
·       Nifty Metal index soars 4%; Tata Steel, SAIL rally up to 7%
·       ITC jumps to 7-week high as no tobacco tax relieves investors
·       Sun Pharma rallies 7%, hits new 52-week high post Q3 results
·       Govt brings crypto currency, other digital assets under tax net
 
Frontline indices whipsawed in trade on Tuesday but eventually ended 1.4 per cent higher as investors gave a thumbs-up to the pro-growth Budget for 2022-23. Finance Minister Nirmala Sitharaman on Tuesday unveiled a Budget that aims to boost growth amid continued disruption from Covid-19 and rising inflation.
 
Moreover, analysts said the Budget continued the focus on quality expenditure. And, the capex increase of 35 per cent – in key sectors like Infra, housing, defence, railways and agriculture – could have a multiplier effect on the economy.
 
According to Vinod Nair, Head of Research at Geojit Financial Services, this Budget is expected to support growth in the long term, but high capex, fiscal deficit and borrowing plans against the backdrop of rising inflation, oil prices and interest rates could be some challenges in the short to medium term.
 
Equity markets logged strong gains after taking a sharp dip mid-way but recovered soon after. The S&P BSE Sensex jumped over 1,000 points to hit its intra-day high level but eventually ended 848 points higher at 58,863. The Nifty50 followed a similar trajectory and rose 367 points intra-day before it closed at 17,577, up 237 points.
 
Tata Steel, Sun Pharma, IndusInd Bank, L&T, Ultratech Cement, ITC, Titan and HCL Tech were the top gainers, while M&M, Bharti Airtel, SBI, PowerGrid and NTPC were top laggards. 
 
In the broader markets, the BSE MidCap and SmallCap indices ended 1 per cent and 0.9 per cent higher, respectively. The volatility index, India VIX, cooled off 9 per cent to end below the 20 mark.
 
Sectorally, the Nifty PSU Bank index ended in the red, down 0.6 per cent, as the Budget document remained silent on PSB privatisation. The Nifty Auto index and the Oil & Gas index were other losers, closing 0.7 per cent down each.
 
On the upside, the Nifty Metal index zoomed nearly 5 per cent after the government announced its Rs 7.5-trillion capex plan for 2022-23. It also proposed to extend the customs duty exemption on steel scrap by one year.
 
Among individual stocks, FMCG major ITC closed 3% higher and hit a seven-week high on the BSE as the rumoured hike in taxes on tobacco was not proposed in the Budget.
 
Further, Sun Pharma ended nearly 7% higher on the BSE, as it hit a new 52-week high on reporting a good operational performance in the December quarter. The drug maker's revenue and PAT grew 11 per cent year-on-year.
 
Lastly, one of the most attention-grabbing announcements from the Budget was the levy of tax on digital assets like cryptocurrency. The Finance Minister said that gifts received in the form of cryptocurrencies and other virtual digital assets would be taxed at 30 per cent in the hands of the receiver. This move is believed to have finally brought cryptocurrencies and NFTs under a legal tax net in the country.