Sensex jumped 485.68 points to close at 28,141.64, the highest in over three months. Nifty too gained 155.10 pts to close at 8,716.40. Both the indices scored their biggest single-day gain since October 2016.
Financial and realty stocks powered the momentum of the markets as they welcomed the budgetary proposals of infusing Rs 10,000 crore in public sector banks and keeping long-term capital gains tax (LTCG) and short-term tax rate (STCG) unchanged for the capital market.
Additionally, Finance Minister Arun Jaitley proposed that category I and II foreign portfolio investors (FPIs) should be exempted from taxation on indirect transfers, which made investors a happy lot.
Shares of state-run banks such as SBI, Union Bank of India, Bank of Baroda, PNB and Syndicate Bank hogged limelight and climbed by up to 5.64 per cent as the government announced infusion of Rs 10,000 crore in public sector banks in the next fiscal.
The Budget also allocated a record Rs 3.96 lakh crore to the infrastructure sector. Also, the government announced infrastructure status to affordable housing to encourage investment and offered tax sops for developers sitting on completed unsold inventories, which triggered buying in realty stocks.
DLF, Godrej Properties, HDIL, Oberoi Realty, Prestige Estate Projects, Sobha Ltd and Unitech zoomed by up to 6.74 per cent.
Shares of companies related to the agriculture sector such as Dhanuka Agritech and Jain Irrigation Systems ended higher by up to 3.71 per cent after Jaitley announced a whopping Rs 1 lakh crore hike in credit target for the next fiscal to Rs 10 lakh crore as part of efforts to double farm income in the next five years.
Major gainers included Maruti Suzuki (4.69 per cent), M&M (4.64 per cent), ITC (4.51 per cent), ICICI Bank (4.40 per cent), GAIL (3.76 per cent) and Adani Ports (3.60 per cent).
The mid-cap index rose 1.77 per cent and small-cap 1.68 per cent.
Moreoever, the market sentment turned bullish on proposal to further liberalise FDI policy, traders said.
The rally was driven by realty, auto, banking, FMCG, metal, capital goods, PSU, oils and gas, infrastructure and power shares.
Overall, 18 out of 30 index-based components ended in the green while others finished in the red.
The rupee too appreciated 34 paise to 67.53 (intra-day) against the dollar added to the positivity.
(With inputs from PTI)