Equity markets surge a day before Budget, Sensex up 665 points

Equity markets witnessed a sudden surge on Thursday, a day ahead of the interim Budget as investors expected sops for the middle class and farm sector.

The benchmark BSE index Sensex shot up 665 points and closed 1.87 per cent higher at 36,256. The Nifty 50 closed 179 points higher at 10,830.

Inaugurating the Budget session of Parliament in morning, President Ram Nath Kovind urged the government to focus on farmers, poor and the middle class. While the economy has been growing at over 7 per cent annually, rural incomes have plunged in the past year due to low crop prices and rising costs.

Market analysts assumed a populist Budget on Friday ahead of the general elections due in April. Sops for the middle class and rural India can push consumption and domestic savings, which are key drivers of a stock market.

A strengthening rupee fresh buying by foreign portfolio investors also improved the market sentiment.

At the National Stock Exchange, ICICI Bank closed 0.33 per cent lower at Rs 364.70, a day after the bank decided to terminate the contract of former managing director and CEO Chanda Kochhar after the B.N. Srikrishna panel found that she violated the bank's code of conduct in relation to a Rs 3,250 crore loan given to Videocon Industries.

Meanwhile, most Asian markets traded in the green following gains on Wall Street after the US Federal Reserve left interest rates unchanged.