The Interim Budget’s proposal to give full rebate to tax payers having annual income up to Rs 5 lakh and a farm package boosted the Indian equity market during the mid-afternoon trade session on Friday.
Observers took note of few key points in the Interim budget like sops to small farmers and announcement of a higher tax exemption limit as key factors which led to the market’s rise.
According to HDFC Securities Deepak Jasani, the push to consumption by way of sops to farmers and middle class families resulted in buying in auto and FMCG stocks.
Sensex and Nifty advanced as Finance Minister Piyush Goyal presented the Interim Budget for 2019-20 in the Lok Sabha on Friday.
Sector-wise, healthy buying was witnessed in the auto, FMCG and capital goods stocks.
At around 1.30 p.m., the Sensex traded at 36,696.63 points, higher by 439.94 points or 1.21 per cent from the previous close of 36,256.69.
The Nifty50 on the National Stock Exchange traded at 10,944.10, higher by 113.15 points or 1.04 per cent.
“For the market it will provide a good signal in the short term since the Interim Budget will not trouble the economic accountancy and populist agenda,” said Vinod Nair, Head of Research, Geojit Financial Services.
Jasani added that the farm package had come in at a figure less than what most people “expected or feared” and the fact that the fiscal deficit for FY20 had been kept at 3.4 per cent “will create mixed feelings”.