Investors got some relief on Monday after a disappointing budget as positive news on the manufacturing activity front saw the Sensex closing higher by 137 points.
While the budget continued to let down the Street, sentiments improved after the IHS Markit India Manufacturing PMI rose from 52.7 in December to 55.3 in January, driven by a rise in new business orders even as demand conditions improved. Market circles added that the stock price movement will be dictated by developments with regard to the coronavirus apart from ongoing results season and the upcoming monetary policy.
With some of the brokerages feeling that any revival of the economy will take more time as the Union Budget 2020-21 did not contain any booster measures, the benchmark index began on a lower note at 39701.02 and fell to a day’s low of 39563.07— a drop of over 172 points. However, it soon rebounded after the survey showed manufacturing activity rising to an eight-year high on new orders.
On the NSE, the 50-share Nifty gained 46.05 points or 0.39 per cent to close at 11707.90. As many as 28 Nifty stocks advanced, led by Asian Paints.
“The market is finding some sanity after the setback of not meeting high expectations from the budget, hereon the focus will be on corporate results and global trends. With valuations on the higher side, the ongoing results reported has been mostly inline with estimates. Manufacturing PMI shows notable rebound providing a hope that the economy will stabilise as mentioned in the budget,’’ Vinod Nair, head of research at Geojit Financial Services, said.
Even as 18 of the Sensex components ended with gains, the recovery was broad as all BSE sectoral indices barring IT and Tech closed with gains. Asian Paints was the top gainer in the Sensex pack, rallying 6.32 per cent. Nestle India rose 5.3 per cent, HUL 5.06 per cent, Bajaj Auto 4.71 per cent, IndusInd Bank 4.29 per cent, Tata Steel 3.06 per cent, Maruti 2.99 per cent and PowerGrid 2.79 per cent.
