Indian share markets extended their historic Budget-day rally and ended 2.5% higher today with the automobile and financial stocks leading gains.

At the closing bell, the BSE Sensex stood higher by 1,197 points (up 2.5%).

The NSE Nifty closed higher by 367 points (up 2.6%).

SBI and UltraTech Cement were among the top gainers today.

The SGX Nifty was trading at 14,730, up by 374 points, at the time of writing.

The BSE Mid Cap index ended up by 2.3%, and the BSE Small Cap index ended higher by 1.6%.

On the sectoral front, gains were largely seen in the auto sector, capital goods sector, and banking sector.

Asian stock markets ended higher today. As of the most recent closing prices, the Hang Seng ended up by 1.2% and the Shanghai Composite ended up 0.8%. The Nikkei ended higher by 1%.

US stock futures are trading higher today indicating a positive opening for Wall Street indices. Nasdaq Futures are trading up by 132 points (up 0.1%), while Dow Futures are trading up by 256 points (up 0.9%).

The rupee is trading at 72.97 against the US$.

Gold prices for the latest contract on MCX are trading down by 0.6% at Rs 48,130 per 10 grams.

Here are the Top 5 Factors Why Indian Share Markets Rallied Today

Progress in US Stimulus: Top Democrats in the US Senate and House of Representatives filed a joint US$ 1.9-trillion Budget measure on Monday, in a step toward bypassing Republicans on COVID-19 relief before President Joe Biden met with Republican senators.

Union Budget 2021: Proposals of the Union budget were the biggest factors moving stock markets. Global rating agency Standard and Poor's (S&P) said that India's Budget represents a comprehensive effort by the central government to shore up the country's economic recovery.

Banking Stocks Rally: The Nifty Bank index rallied as much as 8% post Budget and the majority of gains were led by ICICI Bank, HDFC Bank, Kotak Mahindra Bank, SBI, and IndusInd Bank. The index continued its upward journey today as well when it rose 3.6%.

Firm Global Cues: Positive cues in Asian share markets also improved sentiment. Asian shares rose higher on optimism about economic stimulus and global recovery as the COVID-led worries ease.

FII Inflows: In the run-up to the Budget, the Indian share market witnessed selling by foreign portfolio investors (FPIs) for five consecutive sessions. However, FIIs seem to be back as NSE data shows they net bought worth Rs 14.94 billion on February 1.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

Speaking of the current stock market scenario, note that the BSE Sensex crossed the historical milestone of 50,000 last month on 21 January.

The BSE Sensex rose from a 40,000-mark hit on October 8, 2020, to 50,000 in just 74 sessions. Developments on the vaccine front, a change of guard in the United States, FII buying, and recovery in economic growth are the key factors behind this rally.

Yesterday, Finance Minister Nirmala Sitharaman presented the Union Budget 2021 and the markets gave a huge thumbs up to the measures announced.

The Sensex rallied over 2,300 points yesterday and ended 1,197 points higher today. The Sensex is trading just shy of the 50,000 mark.

The Sensex had lost over 3,500 points in the six sessions before the Budget, but the massive rally on the Budget day, followed by extended gains today lifted the benchmark index to the same level.

Our editors have been pointing out for many weeks now about the risky nature of the market as COVID-19 remains an overhang and the economic outlook remains uncertain.

Have a look at the two charts below, in the order, they have been placed.

Near Term Volatility in Sensex Compensated by Long Term Gains

The year-on-year change in the Sensex was hardly predictable but someone who stayed invested multiplied every lakh nearly 14 times.

In news from the IPO space, Indigo Paints share price listed on bourses today with a stellar premium of 75%.

Further, the stock rallied as much as 110% to hit an intraday high of Rs 3,129 on the BSE, which was also a 20% upper circuit over the opening price.

The initial public offering (IPO) of Indigo Paints had garnered 117 times subscription, generating bids worth Rs 962.2 billion. The qualified institutional buyer (QIB) portion of the issue was subscribed 190 times, while the high net worth individual or HNI segment was subscribed 263 times. The retail and employee portions were subscribed 16 times and 2.5 times, respectively.

We will keep you posted on more updates from this space. Stay tuned.

In news from the capital goods sector, shares of capital goods companies witnessed huge buying interest today, with the S&P BSE Capital Goods index surging 4% to hit an all-time high after the government's strong capital expenditure push in the Budget 2021.

Shares of Larsen & Toubro (L&T), Havells India, BHEL, Kalpataru Power Transmission, Thermax, Finolex Cables, ABB, and Siemens from the capital goods index were up in the range of 5-7%.

L&T share price hit a fresh 52-week high of Rs 1,593, up 8%, rallying as much as 15% in the past two trading days.

The government has stepped up its CAPEX at Rs 5.54 trillion in the Budget, up 26%, to ramp-up infrastructure spending with a focus on economic revival.

Further, Rs 2 trillion towards additional CAPEX to nudge states, allocation of Rs 200 billion toward setting up a development financial institution (DFI) to have a lending portfolio of Rs 5 trillion over the next three year with the aim to mobilize funding required fulfilling National Infrastructure Plan (NIP).

Moving on to news from the plastic products sector, shares of Finolex Industries surged 16% today after reporting a more-than-doubled net profit at Rs 2.6 billion in the December quarter (Q3FY21), on the back of strong revenue growth.

The plastic products company had posted a profit of Rs 0.93 billion in the year-ago quarter.

Revenues increased 52.5% year-on-year (YoY) at Rs 10.7 billion, against Rs 7 billion in Q3FY20.

EBITDA jumped 150% YoY at Rs 3.5 billion, while margins improved to 32.5% from 19.9% in the previous year quarter.

The company's management said a decent monsoon and the subsequent increase in area under Rabi crop sowing are encouraging signs to expect higher demand on the Agri side.

Yesterday, the company's board also approved the splitting of each equity share into five.

The company said that the rationale behind the stock split is to improve the liquidity of the company's shares on the stock market and also to make the same available to small investors.

Finolex Industries' share price ended the day up by 8.3%.