Indian equity indices showcased a stunning performance and went on to outclass indices around the world by vivaciously rallying over three percentage points in the session and settling above the psychological 7,200 (Nifty) and 23,700 (Sensex) levels. Investors continued to build hefty positions across the board as sentiments got a boost after Finance Minister Arun Jaitley retained FY17 fiscal deficit target at 3.5 per cent of GDP despite increasing expenditure for rural and infrastructure spending.  Finance Minister has also assured that the development agenda will not be compromised and a committee will be set up to review the working of fiscal responsibility and Budget management.  Appreciation in Indian rupee too supported the sentiments. Hardening further for the third straight day, Indian rupee rose 38 paise to 68.04 against the dollar on sustained selling of the US currency by banks and exporters.  Also, Index heavyweight ITC made its presence felt by bouncing back and surging over ten percent in the session after the government hiked the excise duty on cigarettes by 10%. Some support also came with the report that the growth in the eight core sectors jumped to a three-month high of 2.9 per cent in January due to sharp pick-up in coal, cement and electricity generation. Furthermore, manufacturing business conditions in India continued to improve, with new orders, exports, output and purchasing activity all rising in February. At 51.1 in February, unchanged from January's reading, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI), pointed to a second consecutive monthly improvement in business conditions across the sector. Meanwhile, the uptick in global markets also buoyed the sentiment after China's central bank further cut the reserve requirement ratio by 0.5%, European shares extended the previous session's gains on Tuesday. Earlier the start of the markets was good and the marketmen seemed to have analyzed the impact of the budget on different sectors and remained on buying spree from the very beginning. Initially it remained selective buying but as the trade progressed it turned broad based and there was no looking back for the markets till the last breath with benchmarks closing near their high points of the day. Finally, the BSE Sensex surged by 777.35 points or 3.38% to 23779.35, while the CNX Nifty rose 235.25 points or 3.37% to 7,222.30.

The US markets closed higher on Tuesday, as investors scooped up bank and technology stocks, highlighting a renewed appetite for assets considered risky as oil stormed higher. It was the best one-day percentage gain for the S&P 500 and the Dow since January 29. Also, the S&P 500 saw its best March start since 2002. Former Federal Reserve Chairman Alan Greenspan came out against negative interest rates as a tool for the US central bank, saying they would be non-productive and would warp investment. On the economy front, the February data add to signs of distress in the US manufacturing economy. Markit's manufacturing Purchasing Managers Index (PMI) came in at 51.3. It recorded the weakest rise in manufacturing output since October 2013. Clients spent prudently because they lacked confidence in the business outlook, and so volumes of new work grew at a sluggish pace. The Institute for Supply Management stated that its manufacturing index rose to 49.5% last month from 48.2% in January. The Dow Jones Industrial Average added 348.58 points or 2.11 percent to 16,865.08, the Nasdaq was up 131.65 points or 2.89 percent to 4,689.60 while, the S&P 500 gained 46.12 points or 2.39 percent to 1,978.35.   

Crude oil futures after a choppy day of trade managed to end higher on Tuesday. Earlier, the U.S. prices briefly fell below $33.50 a barrel, as investors reacted to bearish reports that OPEC could leave its production ceiling at near-record highs for at least the next several months. But recovered on reports that Saudi Arabia is on board with a plan to freeze output at January levels, meaning a global supply glut is unlikely to get much worse. Benchmark crude oil futures for April delivery gained $0.67 or 1.99 percent to $34.41 a barrel after trading in a range of $33.37 and $34.75 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $36.85, up $0.28 or 0.74 percent on the ICE.

Extending its gains for the third-straight-day, Indian rupee ended stronger against dollar due to selling of American currency by banks and exporters. Besides, smart rally in the local equity markets and dollar's weakness against some currencies overseas also added to the positive milieu. The domestic currency got support with Finance Minister Arun Jaitley's Budget speech on Monday, where he announced budgetary support for export sectors while sticking to fiscal prudence path. Some support also came with the report that the growth in the eight core sectors jumped to a three-month high of 2.9 per cent in January due to sharp pick-up in coal, cement and electricity generation. On the global front, euro hit its lowest in almost three years against the yen on Tuesday, as data from the region's big economies bolstered the case for another strong dose of ECB stimulus next week. Finally, the rupee ended at 67.87, 54 paise stronger from its previous close of 68.41 on Monday.

The FIIs as per Tuesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 8434.36 crore against gross selling of Rs 10140.62 crore, while in the debt segment, the gross purchase was of Rs 2103.80 crore with gross sales of Rs 1873.61 crore.        

The US markets bounced back on some upbeat economic data in last session. While the Institute for Supply Management showed a bigger than expected increase, the Commerce Department showed a notable increase in construction spending in the month of January. The Asian markets have extended their jubilation with a strong start, led by the surge in Japanese markets of over four percent gains. The Chinese market too was trading higher despite the yuan weakening after China's central bank lowered the currency's reference rate and Moody's Investors Service cut the outlook on the nation's credit rating. The Indian markets in a huge post budget rally posted their biggest one day gain in last five years. Today, the start is likely to be sanguine and there could be another strong opening with benchmarks extending their gains on jubilant global cues. Meanwhile, Revenue Secretary Hashmukh Adhia has said that the Budget has attempted to make domestic industry competitive, fuel demand and create jobs. He added that new cesses and duty hikes may have made cars and garments costlier but Finance Minister Arun Jaitley's focus in the Budget 2016-17 was job creation and making taxation simpler, not resource mobilization. The auto sales numbers for the month of February will keep the auto stocks buzzing. On the other hand the Aviation stocks are likely to witness some pressure, as the Aviation Turbine Fuel (ATF), or jet fuel, price has been hiked by 12 percent, the hike follows three consecutive price reductions.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Mahindra & Mahindra has reported its auto sales numbers which stood at 44,002 units during February 2016 as against 38,030 units during February 2015, registering a growth of 16%.
• Larsen & Toubro's construction arm L&T Constructions has won orders worth Rs 2213 crore across various businesses.
• IndusInd Bank has inaugurated a new branch in Indore situated at at Yashwant Niwas Road, Shivshakti Nagar Indore in Madhya Pradesh.
• Maruti Suzuki India, country's largest car maker, has registered a fall of 0.9% in its total car sales for the month of February 2016 at 1,17,451 units, as against 1,18,551 units in 2015.
• Lupin's wholly-owned Japanese subsidiary Kyowa Pharmaceutical Industry, is planning to set up a manufacturing plant at Tottori, Japan as part of expansion plans in the country.