A healthy picture of the economy painted by the Economic Survey fired up the markets on Friday, with the benchmark indices gaining the most in five weeks. The benchmark indices rallied nearly 2 per cent after the Survey said the country is on its path to hit a double-digit growth rate. Shares of companies whose prospects are closely linked to the domestic economy - such as banking, realty, power and consumer durables - gained sharply. Foreign investors poured nearly Rs 2,000 crore into the stock market after the Survey forecast GDP growth between 8.1 per cent and 8.5 per cent for the next financial year, which would make India the world's fastest growing major economy. Read our full coverage on Union Budget The benchmark Sensex closed at 29,220.12, up 473.47 points, or 1.65 per cent, the most since January 20.
The broad-based NSE Nifty rose 160.75 points or 1.85 per cent to 8,844.6. Brokers said investors rushed to buy stocks in anticipation of a good Budget, taking cues from the Survey. Finance Minister Arun Jaitley will present the Union Budget on Saturday, when trading will take place during normal market hours. "The market has taken comfort from the Economic Survey. Fundamentals continue to remain bullish. The Survey has also raised hopes of sharp interest rate cuts," said Motilal Oswal, chairman and managing director, Motilal Oswal Financial Services. "How the market does tomorrow will depend on the reform and fiscal consolidation signals." "The current fall in commodity prices, especially of crude oil, will provide a catalyst for acceleration of monetary easing, which will provide headroom for a pick-up in capital investments," said Anup Bagchi, MD & CEO, ICICI Securities. Among Sensex components, shares of Tata Power and Larsen & Tourbo rose the most at nearly 5 per cent each, followed by ICICI Bank, Sterlite Industries and Hindalco, which advanced over 4 per cent each. "In the past, there has been a low correlation between the Survey and the Budget. Hopefully, this time we will see a change," said Harish HV, partner, Grant Thornton India. "The tone of the Survey is cautious and to that extent it signals that a dramatic Budget with big-bang reforms is not envisaged." Market players say the market, less than 2 per cent shy of its all-time high touched in January, has priced in "moderate" expectations from the Budget and there is scope for a sharp movement in either direction depending on the announcements.