Mumbai: Indian equities ended firm on Friday after a roller-coaster trading session as traders cut their bearish bets on the market following the government’s announcement in the interim budget the previous day to cut borrowings in FY25. The stock benchmarks rose as much as 2% earlier in the day with the Nifty hitting an all-time high. But the market gave up a portion of the gains by closing.
The NSE Nifty rose 156.3 points, or 0.72%, to close at 21,853, off its all-time high of 22,126. BSE’s Sensex rose 440.3 points, or 0.61%, to end at 72,085. The index’s Friday high of 73,089 was a few points below its record high of 73,427.
“The spike in the market could be due to short covering after the budget as a lot of expectations had been built-up for months,” said Siddhartha Khemka, VP – head of research (retail) at Motilal Oswal Financial Services. “Bond yields have also cooled down after the budget as the market saw the borrowings under control.”
The yield on India’s 10-year bonds ended at a 7-month low of 7.05% on Friday.
Khemka says the budget has shown the government’s confidence in building the economy and reaching its fiscal consolidation target rather than increased spending in an election year.
“Today’s gains are a very good response to the budget even as global cues remained weak,” he said.
Shares of state owned companies were the top gainers. NBCC, SJVN, SCI, Engineers India and NHPC gained between 10% and 20% each. Nifty’s Volatility Index or VIX – the market’s fear gauge – jumped 1.68% to 14.7. However, it has come down by almost 3% over the past five trading sessions.
“We witnessed some profit booking in Nifty as the index approached its lifetime high, which is the usual course of action and should not be considered negative,” said Dharmesh Shah, head of technical research at ICICI Securities.