Equity benchmarks pared early gains but managed to end modestly higher on Monday after the finance minister announced fresh stimulus measures to revive festive demand and boost the economy. After rallying nearly 400 points in the morning, the 30-share BSE Sensex buckled under selling pressure in afternoon trade, before ending 84.31 points or 0.21 per cent higher at 40,593.80.
Similarly, the NSE Nifty rose 16.75 points or 0.14 per cent to close at 11,930.95.
Both the key indices have extended their winning streak to eight sessions. In a bid to stimulate consumer demand during the festival season and boost the economy, Finance Minister Nirmala Sitharaman on Monday announced payment of cash in lieu of LTC and Rs 10,000 festival advance to government employees.
She also announced additional capital spending and Rs 12,000 crore, 50-year interest-free loan to states to boost the economy that has been battered by the pandemic and the resulting lockdowns. ITC was the top gainer in the Sensex pack, spurting 2.59 per cent, followed by Infosys, Asian Paints, HCL Tech, PowerGrid, Maruti, TCS and ICICI Bank. On the other hand, Bharti Airtel, ONGC, HDFC Bank, IndusInd Bank and Bajaj Auto were among the main laggards, shedding up to 2.33 per cent. Traders said benchmark indices traded with a positive bias through the day, but market participants turned cautious after the finance minister's press conference to announce the stimulus measures. According to Arjun Yash Mahajan, Head Institutional Business at Reliance Securities, the government's effort to stimulate consumers demand by offering advances and cash voucher schemes looks to be short-term in nature and lacks commitment to have a sustainable growth. "This may lead to a kind of destocking led demand improvement ahead of festivals or fiscal end. However, it may not necessarily result in a sustainable recovery. This may not entice the market," he said.