Mumbai, Feb 1 (PTI) Benchmark indices Sensex and Nifty rallied in opening trade on Saturday ahead of the Union Budget presentation.

The 30-share BSE benchmark Sensex climbed 136.44 points to 77,637.01 in opening trade. The NSE Nifty went up by 20.2 points to 23,528.60.

From the 30-share blue-chip pack, ITC Hotels, IndusInd Bank, Mahindra & Mahindra, Sun Pharma, UltraTech Cement and NTPC were among the biggest gainers.

Titan, Kotak Mahindra Bank, Nestle, Asian Paints, HCL Tech and ICICI Bank were among the laggards.

"On the Budget day, the market reactions will be quick in response to Budget announcements. A major expectation from the Budget is a cut in personal income tax to provide relief to the middle class and boost consumption, thereby facilitating growth recovery. The extent of the tax relief remains to be seen. The fact is that there is no fiscal space for big relief.

"The market will be looking for growth stimulating measures; not market-related taxation reliefs like changes in the capital gains taxation," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

The market response to the Budget will not last more than a few days. Trends in growth and earnings recovery will dictate the medium to long-term market direction, he added.

India's economy is likely to expand by 6.3-6.8 per cent in the coming fiscal, much lower than what is needed to become a developed country, and requires deregulation and reforms in areas like land and labour to stimulate growth, according to the government's pre-Budget Economic Survey.

The state of the economy document, tabled in Parliament by Finance Minister Nirmala Sitharaman on Friday, indicated that India's world-beating growth is moderating and more needs to be done to achieve the near 8 per cent annual rate needed to achieve the Viksit Bharat target by 2047.

Asian markets are closed on Saturday due to holidays.

US markets ended lower on Friday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,188.99 crore on Friday, according to exchange data.

Global oil benchmark Brent crude dipped 0.14 per cent to USD 76.76 a barrel.

Rallying for the fourth day running on Friday, the 30-share BSE benchmark ended 740.76 points or 0.97 per cent higher at 77,500.57. The Nifty rallied 258.90 points or 1.11 per cent to 23,508.40. PTI SUM DR

Budget tax relief expectations drive markets, with emphasis on growth-stimulating reforms rather than changes to investment taxation. Markets opened higher ahead of the Union Budget as investors anticipated personal income tax relief to spur consumption, but observers cautioned limited fiscal space makes substantial relief unlikely. Emphasis is on growth-stimulating measures rather than capital gains tax changes, with any immediate market reaction expected to be short-lived. The pre-Budget Economic Survey flagged moderated growth and recommended deregulation and reforms in land and labour to revive potential growth, while foreign institutional selling and softer global cues also influenced near-term sentiment.