Nirmala Sitharaman is the first Finance Minister in 23 years whose speech propelled the Sensex to the highest single-day gains on Budget day. Just a few days ago, she had announced that her Budget this year would be like none before.
On Monday, the Sensex rose 2,314 points, or 5 per cent, to close at 48,600. The broader index Nifty gained 646 points, or 4.74 per cent, to close at 14,281. The Bank Nifty gained 2,523 points or 8.26 per cent to close at 33,089.
The last time the Sensex rose most on Budget day was in 1997, when the then Finance Minister P Chidambaram announced a ‘dream Budget.’ As this time, in 1997, too, the stock market had dipped sharply in the week ahead of the Budget.
Similarly, in 2001, just days before the Budget, the stock markets were on a crash course on the back of Ketan Parekh dot-com controversy. But Yashwant Sinha’s Budget speech sent the Sensex and Nifty rising 4.3 per cent in a single day.
But, today, Sitharaman became the first Finance Minister trying to best her own record. In September 2019, when she announced an over 10 per cent cut in the corporate tax rates, the Sensex and Nifty rose 5.32 per cent in a single trading session. That one day rise in stock markets came to be known as the ‘Nirmala Candle’ on the technical charts of the Nifty index. On Monday, the Nifty index came close to breaking that ‘Nirmala Candle’ of single day gains. Just days prior to her announcement of the corporate tax cuts, too, the markets were on a downward spiral.
“Nifty today was tad short of the 5 per cent single day gain known on the technical charts as the ‘Nirmala Candle.’ It is a pattern that was formed on September 20, 2019 when she announced the corporate tax breaks. ‘Nirmala Candle’ still holds its record,” said Rohit Srivastava, founder and strategist, Indiacharts.
According to Srivastava, market sentiments had reached its lowest in recent times like they were in 2019 ahead of the tax-break announcement. “Charts show that even after today’s stupendous rally, the sentiment has not turned extremely bullish. Negative sentiments are all but negated by the Budget setting the stage for a further rally,” Srivastava said.
Per the cash segment provisional data, foreign portfolio investors bought stocks worth ₹1,494 crore while domestic institutions were net sellers of ₹90 crore on Monday.