Sensex rallies for 2nd day on Budget 2017

Mumbai: The Budget rally entered the second day today after the Sensex closed at nearly a 4-month high of 28,227, driven by healthcare, IT and auto stocks amid mixed global shares.

Apart from auto, capital goods and infra, all sectoral indices notched up smart gains. After moving between 28,070.81 and 28,299.92, the Sensex settled up 84.97 points, or 0.30 per cent, at 28,226.61. This is the highest closing since October 4 last when it closed at 28,334.55.

The index had rallied 486 points yesterday, spurred by a series of market-friendly budget moves. The 50-share NSE Nifty finished higher by 17.85 points, or 0.20 per cent, at 8,734.25 after trading between 8,685.80 and 8,757.60.

"The turnaround in IT and pharma stocks and the weakness in the dollar after an unchanged US Fed policy have given some impetus to the market," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.

Market stayed in a tight range during the first half due to profit-booking after yesterday's sharp rally and a weak trend in Asia, but revival in buying interest among domestic institutional and retail investors led stocks higher.

The Budget's significant allocation to infrastructure and focus on affordable housing, rural development and agriculture contributed to the rally. Coming up next is RBI's monetary policy next week which is being closely tracked by investors.

Software stocks such as Infosys, TCS and Tech Mahindra were back in demand and gained by up to 2.85 per cent. Drug major Dr Reddy's emerged as the top gainer among Sensex constituents by jumping 3.31 per cent followed by Sun Pharma (2.64 per cent). Overall, 15 scrips out of 30 Sensex stocks ended higher.

However, some like Hero MotoCorp, M&M and Tata Motors in the auto sector faced selling following disappointing January sales numbers. Foreign portfolio investors (FPIs) net bought shares worth Rs 92.73 crore while domestic institutional investors (DIIs) lapped up shares worth a net Rs 1,133.74 crore yesterday, as per provisional data.

Buying by retail investors continued in broader markets, helping the small-cap and mid-cap indices gain up to 0.95 per cent. Among the BSE sectoral indices, consumer durables gained the most by 2.18 per cent, followed by healthcare 1.79 per cent, IT 1.78 per cent and technology 1.68 per cent.

Other Asian markets showed a weak trend, with Hong Kong's Hang Seng ending 0.61 per cent lower and Nikkei losing 1.22 per cent. European markets were in a mixed shape in their early trade, with Frankfurt rising 1.08 per cent and London's FTSE down 0.11 per cent. Paris CAC 40 shed 0.23 per cent.