Reliance stocks lead partial recovery of Indian stocks after budget day saleoff
India's equity benchmarks rose on Monday, with gains led by?infrastructure shares and bargain-hunting in heavyweight Reliance Industries as the?markets recovered from the damage they suffered after the federal budget.
The?Nifty50 rose 1.06%, to 25,088.4, and the BSE Sensex gained 1.17%, to 81.666.46. The indexes fluctuated between gains and losses of 0.6% intraday.
On Sunday, the benchmark indexes dropped about 2%.
Marking
Their biggest percentage drop on budget day in six years.
Seshadri Seshadri of Emkay Global Financial Services said, "We see limited downward risk (for the Nifty), after Sunday's 2% decline."
According to three analysts, the?budget prioritized infrastructure and manufacturing, while maintaining fiscal discipline. Sunday's response was therefore a knee-jerk reaction.
The sell-off on Sunday was triggered due to the proposal to increase the securities 'transaction tax' on derivatives. Also, the fiscal year 2027?gross borrowings were higher than expected and there were no measures to reduce capital gains tax.
Anand Gupta is the lead portfolio manager for Indian equity at Allianz Global Investors.
He said that historically, marginal increases in STT had no material impact on the market, liquidity, or hedging activities.
Fourteen out of the 16 major sectors posted gains for the day. The small-caps and the mid-caps gained?0.6% each.
Reliance Industries, a conglomerate that combines oil and telecoms, grew by 3.2%. It was the largest contributor to benchmark gains. The move was a rebound from the 3.5% decline on budget day.
Traders piled in to the infrastructure giant Larsen & Toubro, whose shares rose 2.8%. This was a result of the budget's emphasis on capital expenditure.
Shriram Finance, the largest loser in the Nifty50 index, fell by 3.2% on fears that increased borrowings from the government will increase its funding costs.
(source: Reuters)
