Infra, cement stocks gain from 35% surge in capex outlay after FMs Budget speech

Cement and infrastructure stocks were in demand after Finance Minister Nirmala Sitharaman boosted capital expenditure for 2022-23 in the Union Budget, which was unveiled on February 1. The finance minister set the capital spending for next year at Rs. 7.5 lakh crore, which is much more than the Rs 5.5 lakh crore projected for 2021-22.

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According to the finance minister, the capital investment outlay for the upcoming fiscal year would be 2.9% of India’s GDP. Analysts had predicted that the government would increase capital expenditure by 20%, but Budget 2022 increased expenditure by 35%.

Big capital spending is considered a significant benefit for infrastructure companies since it will increase their order books in the future due to increased government project tendering activity.

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Siemens, Larsen & Toubro, Adani Ports, and Container Corporation of India all saw their stock prices rise by 2-4%. Cement companies benefited greatly from increased expenditure on public investment and affordable housing. Under the Affordable Housing Scheme, the government has allocated Rs 48,000 crore for housing projects. Ramco Cements, UltraTech Cement, Ambuja Cements, and Shree Cement all saw their stock prices rise by 2-4%.

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The Sensex is now trading at 58,379.62, up 365.45 points or 0.63%, after ranging between 58,242.44 and 59,032.20. On the index, there were 21 stocks that advanced and 9 stocks that declined. The Nifty is trading at 17,429.40, up 89.55 points or 0.52%, after trading in a range of 17,392.85 and 17,622.40. On the index, there were 31 stocks that advanced and 19 stocks that declined.

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The broader indices were trading in the green with the BSE midcap index rising 0.17%, while the small-cap index was up by 0.13%. The top gaining sectoral indices on the BSE were Metal up by 2.05%, Basic Materials up by 1.37%, Healthcare up by 1.24%, Capital Goods up by 1.24% and FMCG up by 0.97%, while PSU was down by 1.47%, Auto down by 1.23%, Oil & Gas down by 1.14%, Telecom down by 0.49% and Energy was down by 0.42%.