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Markets ended higher, amid a choppy trading session, led by infrastructure stocks and private lenders even as ITC extended losses in wake of the steep excise duty hike on cigarettes.
The 30-share Sensex ended up 98 points at 29,459 and the 50-share Nifty gained 55 points to end at 8,957.
Meanwhile, the broader market outperformed the benchmark indices with BSE Mid-cap index rising 1% to end at a record closing high of 10,952.93 and the Small-cap index ended up 0.9% at 11,370.80
On the macroeconomic front, the HSBC Manufacturing Purchasing Managers' Index, compiled by Markit fell for the second consecutive month, to 51.2 in February from 52.9 in January implying that manufacturing activity expanded at its slowest pace in five months in February on slowdown in new orders dragging overall output.
"Extending previous session’s jubilation, equity benchmarks made a gap-up start on Monday and managed to end with modest gains amid volatility. Sentiments were upbeat in response to announcement made by the Finance Minister in his Union Budget speech and it was reflecting in stocks across the board. However, profit taking trigger after the figure of growth in India’s manufacturing activities fell to a five-month low in February, showed the widely tracked HSBC Purchasing Managers’ Index (PMI). But, buying again intensified in the later half which aided index to close around the day’s high by the end," said Jayant Manglik, President-retail distribution, Religare Securities in a post market note.
"Keeping in mind the present market scenario post Budget, it makes sense to uphold stock specific approach with buy on dips strategy. Among the sectors, we reiterate our preference for private banking, finance alongside with selective counters from capital goods, infra and auto space for fresh buying. On the other hand, energy, metal and PSU bank may continue to trade under pressure," he adds.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 614.03 crore on Saturday, as per provisional data.
Infrastructure stocks gain
Infrastructure shares led the gains with L&T and BHEL up over 4% each on expectations of fresh order inflows in the wake of Rs 70,000 crore additional investment in infrastructure proposed in the Budget for the next fiscal. Further, cement shares also ended higher on hopes of higher demand from large infrastructure projects and the housing sector. ACC, Ambuja Cements and UltraTech Cement ended up 5-7% each.
"On efforts to support recovery in capex, the budget did announce a few good measures to kick start public infrastructure spending. We read the overall tone of the budget as another positive step towards its broader objective to push policy changes to address the poverty challenge by aiming to revive productive jobs. We continue to be bullish on Indian equities with our key overweight positions being private sector banks, industrials, discretionary consumption and technology," Morgan Stanley said in note on the Budget.
Axis Bank was the top gainer among private lenders up 6% followed by HDFC Bank and ICICI Bank. The fungibility of FII and FDI in the Budget proposal would allow private sector lenders to raise additional foreign capital.
Wipro ended up 0.7% on reports that it has partenered with the World Economic Forum (WEF) to develop a cyber value-at-risk (VAR) framework that will allow organisations to assess threat landscape, the nature of assets needed protection and quality of defenses.
Pharma stocks ended higher after the government allocated Rs 33,152 crore to the health sector, Finance Minister Arun Jaitley said in his budget speech. Cipla surged 6%, Dr Reddy's Lab gained 1% and Sun Pharma ended up 2%.
Maruti Suzuki India today reported 8.7 per cent increase in total sales in February at 1,18,551 units as against 1,09,104 units in the same period of last year. The stock ended up 3%.
ITC extended losses to end nearly 5% lower. In his budget proposals, Finance Minister raised excise duty on cigarettes by 25% for cigarettes of length not exceeding 65 mm, and by 15% for cigarettes of other lengths.
Bajaj Auto ended down 4% after reporting a 22% year decline in total sales in February at 243,319 units as against 313,294 units posted in the same month last year.
Among other shares, state-owned oil marketing companies IOC, HPCL and BPCL ended up 4-6% each after they hike in petrol by Rs 3.18/litre and diesel by Rs 3.09/litre.
Aviation shares such as SpiceJet and Jet Airways ended down 3% each on hike in ATF price by 8.2% to Rs 50,363 per kilolitre. Aviation turbine fuel accounts for about 40% of the airline's operating expenses.
