Sensex, Nifty rally as Economic Survey ignites hopes of pro-growth budget

Benchmark Sensex jumped 741 points while Nifty rallied to close above 23,500 on Friday on heavy buying in Larsen & Toubro post its Q3 results and the Economic Survey predicting a pro-growth budget.

Rallying for the fourth day running, the 30-share BSE Sensex ended 740.76 points or 0.97% higher at 77,500.57. During the day, it jumped 846.15 points or 1.10% to 77,605.96.

The NSE Nifty rallied 258.90 points or 1.11% to 23,508.40. During the day, it climbed 297.3 points or 1.27% to 23,546.80.

India is expected to record GDP growth of 6.3-6.8% in 2025-26 on the back of strong fundamentals, calibrated fiscal consolidation, and stable private consumption, according to the Economic Survey tabled in Parliament on Friday.

"The indices are fueled with expectations of a pro-growth budget and prudent fiscal as indicated in the economic survey. Positive global cues and better-than-expected results from major companies also contributed to the upward trend.

"Market expects reductions in individual tax and job generation to boost consumption. By cutting fiscal deficit but continuing to boost infrastructure spending, the government may set the tone for a potential recovery in the consolidating market," Vinod Nair, Head of Research, Geojit Financial Services, said.

From the 30-share blue-chip pack, Larsen & Toubro climbed 4.31% after the infrastructure and engineering major reported a 14% rise in consolidated profit after tax to Rs 3,359 crore for the December quarter on the back of higher revenue from operations.

Nestle surged 4.25% after the FMCG major reported a 4.94% increase in net profit at Rs 688.01 crore for the quarter ended December 31, 2024.

IndusInd Bank, Titan, Tata Motors, Tata Steel, ITC, and Maruti were the other major gainers. ITC Hotels, Bharti Airtel, Bajaj Finserv, Bajaj Finance, and ICICI Bank were among the laggards.

In January, the BSE benchmark declined 638.44 points or 0.81%, while the Nifty lost 136.4 points or 0.57%.

The BSE smallcap gauge jumped 1.83% and the midcap index surged 1.76%.

All BSE sectoral indices ended higher. Capital Goods surged the most by 3.89%, followed by industrials (3.61%), power (2.56%), realty (2.24%), utilities (2.05%), energy (1.92%), and FMCG (1.90%).

As many as 2,719 stocks advanced, while 1,203 declined and 125 remained unchanged on the BSE.

"As the Union Budget approaches, the critical expectation is to revive market sentiment. Recent budgets have seen increased taxation on the capital market—higher STT, capital gains taxes, taxation of dividend income in shareholders’ hands, and the removal of tax benefits on buybacks.

"This year, it’s imperative for the Finance Minister to avoid introducing new taxes on investors. Instead, providing meaningful tax rebates to enhance consumer spending power could help revive the consumption cycle," Sunil Damania, Chief Investment Officer, Mojopms, said.

The Economic Survey noted that on a longer-term basis, Indian markets have been among the best-performing markets in the world.

BSE market capitalisation to GDP ratio stood at 136% at the end of December 2024, rising significantly over the last 10 years, it added.

"...the fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. On the balance of these considerations, we expect that the growth in FY26 would be between 6.3 and 6.8%," the survey said.

In Asian markets, Tokyo settled in positive territory, while Seoul ended lower. Markets in Shanghai and Hong Kong were closed due to holidays.

European markets were trading higher. US markets ended in the positive zone on Thursday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,582.95 crore on Thursday, according to exchange data.

Global oil benchmark Brent crude dipped 0.26% to $76.64 a barrel.

The 30-share BSE benchmark Sensex advanced 226.85 points or 0.30% to settle at 76,759.81 on Thursday. The Nifty went up by 86.40 points or 0.37% to 23,249.50.

Stock markets will remain open for trading on Saturday due to the Union Budget presentation.