The Bulls had a free run on February 4 as the market realised there was no negative news in the Budget though it failed to meet high expectations.
Oil, trading at $55 a barrel, down $10 from January’s high, too, remained favourable for India. Global markets also rebounded as sentiment improved after factoring in coronavirus spread.
In two trading days, the benchmark indices recouped Budget Day losses and were back to above pre-budget levels.
The BSE Sensex rallied 917.07 points, or 2.30 percent, to 40,789.38 and the Nifty rose 271.80 points, or 2.32 percent, to 11,979.70. The broader markets also gained strength, with the BSE Midcap and Smallcap indices rising around 1.3 percent each.
"The Budget failed to provide any short-term relief, the market experienced massive carnage on the Budget Day. This was a knee-jerk reaction but as investors realised that the Budget will aid in the long-term growth of the economy, the market picked up. With the Budget overhang gone, investors are breathing a sigh of relief and are back to making fresh calls," Umesh Mehta, Head of Research at Samco Securities, told Moneycontrol.
January auto sales numbers were comparatively better and with no other negative news, the Indian bourses saw a sudden rally, he said.
As a result, more than 70 stocks hit their 52-week high on February 4. Twenty-two of these were at a new all-time high.
Stocks that hit record high included Affle India, Bata India, IndiaMart InterMesh, IRCTC, GMM Pfaudler, Godrej Properties, Honeywell Automation, MAS Financial Services, Shree Cements and Info Edge India.
The market breadth also remained in favour of the bulls as about two shares advanced for every share falling on the BSE.
All sectoral indices closed in the green, with Bank, Metal, Oil & Gas, FMCG, Healthcare, IT, Auto, Realty and Power rallying 1-3 percent."Market witnessed a V-shape recovery post the overreaction on the Budget Day, as the expectation was too high. These are typical tendency of the market to over and under-estimate, given its volatile trading pattern. The market is focusing on the earnings growth and the global trend, Q3 has provided a positive trend to earnings while global market is positive," Vinod Nair, Head of Research at Geojit Financial Services, said.