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Indian equity benchmarks ended at record closing high levels on Monday led by strong gains in banking, financial and realty stocks amid positive global cues. Besides, strong corporate earnings in the December quarter have raised hopes of a quick economic recovery. Markets made gap-up opening on the back of positive macro-economic data. The Index of Industrial Production (IIP) grew by 1 per cent in December on a year-on-year (Y-o-Y) basis compared with a 2 per cent decline in the previous month, the data released by the National Statistical Office showed. On the other hand, the consumer price index (CPI)-based inflation rate fell for the third consecutive month to 4.06 per cent in January as food inflation, pulled down by deflation in vegetables, drastically declined. Some support also came in as PHDCCI said expectations that the country's GDP would record growth in the third and fourth quarters of 2020-21 are getting stronger on account of various reforms undertaken by the government in the last ten months.

Markets extended gains in late afternoon session, taking support from Chief Economic Adviser K V Subramanian’s statement that the reform measures announced in the Budget 2021-22 will play a big role in India becoming a $5 trillion economy and beyond. Sentiments remained up-beat with Finance Minister Nirmala Sitharaman’s statement that the government, undeterred by the COVID-19 pandemic, has been pursuing reforms for achieving sustained long-term growth in a bid to make India one of the top economies of the world in the coming decades. Market participants also took a note of India’s inflation based on wholesale price index (WPI) eased to 2.03% (provisional) for the month of January 2021 as compared to 3.52% during the corresponding month of the previous year. However, sequentially inflation increased from a rise of 1.22% in December 2020.

On the global front, Asian markets ended higher on Monday amid signs of a slowdown in the rate of coronavirus infections and the progress being made with vaccines. Besides, the Cabinet Office said in a preliminary report that Japan's GDP expanded a seasonally adjusted 3.0 percent sequentially in the fourth quarter of 2020. That exceeded expectations for an increase of 2.3 percent following the 5.3 percent gain in the previous three months. On an annualized basis, GDP spiked 12.7 percent - again beating forecasts for a gain of 9.5 percent following the 22.9 percent surge in the three months prior. Also, customs agency data showed South Korea's exports surged an annual 69.1 percent during the first 10 days of February, driven by a sales boost in major export products and strong overseas demand.  European markets were trading higher on hopes of a rapid recovery from the coronavirus pandemic.

Finally, the BSE Sensex rose 609.83 points or 1.18% to 52,154.13, while the CNX Nifty was up by 151.40 points or 1.00% to 15,314.70.

The BSE Sensex touched high and low of 52,235.97 and 51,886.46, respectively and there were 19 stocks advancing against 11 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 1.40%, while Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Bankex up by 3.31%, Finance up by 2.71%, Realty up by 1.46%, Industrials up by 0.90% and Telecom up by 0.88%, while IT down by 0.62%, Consumer Durables down by 0.56%, Metal down by 0.43%, TECK down by 0.42% and Oil & Gas down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 5.88%, ICICI Bank up by 4.09%, Bajaj Finance up by 3.66%, SBI up by 3.52% and Indusind Bank up by 2.98%. On the flip side, Dr. Reddys Lab down by 1.77%, TCS down by 1.60%, Tech Mahindra down by 1.19%, Hindustan Unilever down by 1.16% and Asian Paints down by 1.14% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that the government, undeterred by the COVID-19 pandemic, has been pursuing reforms for achieving sustained long-term growth in a bid to make India one of the top economies of the world in the coming decades. She also said that the Prime Minister did not lose any opportunity to continue with the reforms and this Budget has set the pace for India to become self-reliant or Aatmanirbhar.

The minister has stated that her Budget for 2021-22, has provided the highest capex growth of 34.4 percent by providing more money to railways, roads and defence. Referring to a series of measures taken to stimulate the economy hit by the pandemic, she said COVID-19 did not deter the government from taking up reforms, which are going to be necessary for sustaining long-term goals for this country.

On handling of COVID-19 pandemic, Sitharaman said ‘the death rates are the lowest in the world, active cases have come down... we have actually managed to bend the curve. And as a result, the revival of the economy looks a lot more sustainable and this Budget gives necessary impetus.’ 

The CNX Nifty traded in a range of 15,340.15 and 15,243.40 and there were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 6.21%, ICICI Bank up by 4.16%, SBI up by 3.96%, Bajaj Finance up by 3.63% and Indusind Bank up by 3.08%. On the flip side, SBI Life Insurance down by 2.29%, HDFC Life Insurance down by 2.05%, Dr. Reddys Lab down by 1.77%, Tata Steel down by 1.40% and TCS down by 1.31% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 93.94 points or 1.43% to 6,683.73, France’s CAC rose 65.76 points or 1.15% to 5,769.43 and Germany’s DAX was up by 49.02 points or 0.35% to 14,098.91.

Asian markets ended higher on Monday tracking Wall Street's overnight gains on Friday after signs of a drop in the rate of corona virus infections globally. Further, raising expectations for more stimulus measures from United States and the progress in vaccines too supported market sentiment. Japanese shares closed higher with solid domestic growth data. The Cabinet Office said Japan's seasonally adjusted GDP grows 3.0% sequentially in the fourth quarter of 2020, which exceeded expectations for an increase of 2.3% following the 5.3% gain in the previous three months. On an annualized basis, GDP spiked 12.7% following the 22.9% surge in the three months prior. Approval of Japan's first vaccine too boosted sentiment. Meanwhile, markets in Taiwan, China and Hong Kong were closed for the Lunar New Year.