Post-budget rally continued on the stock markets on Wednesday with key indices gaining another 1.18 per cent as positive global cues combined with Budget-led buoyancy boosted the sentiment. After the 814-point gain on Tuesday, the benchmark Sensex rallied by another 696 points to 59,558.33 and the NSE Nifty Index jumped by 203 points to 17,780.00.
With this gain, the Sensex has risen by 1,544 points, or 2.66 per cent, in the last two sessions after Finance Minister Nirmala Sitharaman announced the Union Budget. Banking and finance stocks which gained two per cent led the rally on Wednesday, supported by IT, realty, consumer durables and healthcare stocks which gained up to 1.50 per cent.
The rupee pared its initial gains to settle on flat note at 74.83 against US currency on Wednesday due to dollar demand from foreign banks.
Bond yields also continued to rise with the yield on benchmark 10 per cent government bond rising by another three basis points to 6.88 per cent as the market fretted over higher government borrowings. For the stock markets, the budget overall was a balanced one with no unpleasant surprises, adding to the bullishness. While there were some disappointments on the absence of measures to improve consumption, economic recovery in FY23 coupled with vaccination progress would continue to drive demand recovery ahead, analysts said. Given the continuity of policy focus and pronouncements, markets are likely to discount the budget and shift focus to rising interest rate regime globally and consequent higher bond yields and corporate earnings growth that has remained resilient so far in the ongoing third quarter of FY22 earnings season, said an analyst. Going forward, markets are likely to focus on the RBI policy on February 9. However, markets are likely to be cautious for next few weeks given the line-up of global central bank tightening and rate actions while the pressures of liquidity withdrawal.
