Equity markets seemed to be in a cheerful mood on Friday, with benchmark indices gaining for the fourth straight day ahead of the Union Budget. The BSE Sensex rose 741 points or nearly 1 per cent to end the day at 77,500.57 level, and the 50-share NSE Nifty50 index jumped 1.1 per cent or 259 points to close at 23,508.40.
Markets gain came on a day the Economic Survey presented by Finance Minister Nirmala Sitharaman projected a 6.4 per cent GDP growth in the current financial year ending March 2025 and estimated GDP growth to range between 6.3-6.8 per cent next year.
The survey maintained that the fundamentals of the domestic economy remained robust. Navigating global headwinds would require strategic and prudent policy management, it said.
"While the government has projected a conservative outlook for FY26, the combination of favourable agricultural conditions, strategic public investments and potential reforms or trade agreements presents an opportunity for the economy to outperform expectations, leading to positive surprises on the upside," said Vikas Gupta, CEO and chief investment strategist at OmniScience Capital.
The survey importantly stresses deregulation to drive economic growth, which lifted investor mood.
"Lowering the cost of business through deregulation will make a significant contribution to accelerating economic growth and employment amidst unprecedented global challenges," the economic survey noted.
According to Indranil Pan, the survey lays adequate stress on how deregulation can foster economic growth, and that employment and skilling are existential priorities.
"These will help India also improve its global competitiveness and help pull in global capital," he said.
Prashant Pimple, chief investment officer - fixed income at Baroda BNP Paribas AMC, expects deregulation to be a "critical feature" in the Union Budget as a tool to spur investments in the economy while seeking to ensure economic stability and resilience.
In addition to that was Prime Minister Narendra Modi's speech, in which he invoked the Goddess Lakshmi and hoped she would shower the poor and middle class with blessings. The remarks left many wondering if it was a hint that the Budget this year will provide a much-needed relief to the vast middle class.
Over the last few months, there have been growing signs of a slowdown in urban consumption, and there has been rising demand that the finance minister would provide income tax relief to the middle class through increased standard deductions, lower tax rates, or adjusted tax slabs.
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"The indices are fueled with expectations of a pro-growth budget and prudent fiscal as indicated in the economic survey. Market expects reductions in individual tax and job generation to boost consumption," said Vinod Nair, head of research at Geojit Financial Services.
Company-specific news was also a reason behind Friday's rally. Larsen & Toubro shares rose more than 4 per cent and were the biggest gainer in the Sensex after the company reported a 14 per cent rise in quarterly net profit. Nestle India shares were also in demand post its quarterly results; the stock also rose over 4 per cent.
Other major gainers included IndusInd Bank (3.7 per cent), Titan (3.6 per cent), Tata Motors and Tata Steel (2.7 per cent), Maruti Suzuki (2.6 per cent), and Hindustan Unilever and ITC (2.5 per cent).
Broader markets outperformed the Sensex and Nifty on Friday. The BSE Midcap as well as the Smallcap index jumped 1.8 per cent following their recent correction.
