Mumbai :Stocks: The week saw the domestic market backing Finance Minister Arun Jaitley’s Union Budget as the benchmark Sensex rallied by 1,492.18 points and the broader Nifty by 455.60 points, their biggest weekly gain since four years.
Despite initial scare on proposal like tax on higher dividend distribution, the much awaited Budget saw bulls prevailing upon the bears as investors digested Finance Minister’s resolve for fiscal prudence and keep deficit at 3.5 per cent for 2016-17, leading to an all-out expectation that RBI will ease monetary policy.
Optimism multiplied with budgetary allocation on growth supportive fundamentals of nearly Rs 36,000 crore for infra and farm sectors and government providing Rs 25,000 crore to tackle NPAs for banking sectors apart from additional Reserve Bank relaxing capital regulations norms for lender banks.
Expanding manufacturing activity for the second month and surging Indian rupee which strengthened nearly 2 per cent against the US dollar amid foreign portfolio investors back to aggressive buying in Indian equities, boosted the sentiment.
Improving global stocks scenario also proved to be supportive for the domestic market during the week, while the latest data of International Monetary Fund (IMF) on India’s growth estimated at 7.3 per cent this fiscal and 7.5 per cent next year even as recovery remains uneven, boosted the positive vibe.
Sensex zoomed by 1,492.18 points or 6.44 per cent to end the week at 24,646.48 after moving in a range of 24,719.05 and 22,494.61, which is the best weekly performance since December 2011.
The NSE 50-share index also jumped by 455.60 points or 6.48 per cent to 7,485.35.