New Delhi: Terming the Budget 2011-2012 as "progressive" and "balanced", stock market experts said it had positive surprises like encouraging FII inflow, a roadmap for reforms and checking fiscal deficit, all of which have perked up investor mood.
The Bombay Stock Exchange benchmark Sensex, which had plummeted by 13.69 per cent in the year so far, saw an impressive rebound minutes into the Budget presentation.
Intra-day, the key index zoomed up by 595.62 points to hit a high of 18,296.53, driven by buying across sectors.
"Quantum increase in the limit for FII investment in infrastructure bonds and allowing foreign investors to invest in domestic mutual funds are bold moves towards liberalising the capital account," said SBI MF CIO Navneet Munot.
Investors who have been extremely nervous so far this year were positively surprised as the Budget exceeded street expectations.
"The Finance Minister has managed to announce a growth-oriented Budget, where he has hinted at taking progressive policy actions in the key areas of delivery of subsidies, attracting FDI, boosting infra development during the course of the year. Overall, it is a budget that has exceeded expectations that were rather low anyways," Sharekhan Head Research Gaurav Dua said.
Analysts said investors have given thumbs-up to the efforts of Finance Minister Pranab Mukherjee to address the major concerns of inflation and fiscal deficit, which were haunting the market.
"Thanks to the additional collection in 3G spectrum, that the government could achieve 5.1 per cent fiscal deficit for the current financial year, which is a great performance.The road map for the Fiscal Deficit reduction in the coming 2 3 years is very encouraging for the global investors and capital market," SMC Strategist & Head of Research Jagannadham Thunuguntla said.
However, credit rating agency Fitch said that the government s fiscal deficit target of 4.6 per cent of GDP in the fiscal year 2012, compared to an estimate of 5.1 per cent of GDP in the fiscal year 2011, will not be easy to meet.
It said the government will not have the benefit of one-off revenue proceeds from 3G and Broadband Wireless Access auctions as it did in the fiscal year 2011.
Analysts said the government's decision of not increasing the excise duty is a very bold move, and shows that the finance ministry is betting clearly on growth.
"The market was extremely nervous prior to the announcement of the Budget, and was fearing a tough budget.
The Finance Minister did not announce any new tax or duty, which along with plan to contain rising inflation and fiscal deficit, gave a breather to the market," said Bonanza Portfolio Head Equity Avinash Gupta.
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