The budget proposals failed to boostthe market sentiment due to lack of major incentives for thecorporates as the Sensex today tanked byalmost 291 points to end below 19K-mark after three months at18,861.54, despite positive global advices.
Profit-booking on the last day of the expiry of Februaryalso weighed on the market.
Finance Minister P Chidambaram presenting its eighthannual budget in Parliament today raised surcharge on domesticcompanies to 10 pct from 5 pct whose income exceeds Rs 10 crand also increased surcharge on dividend distribution tax asthe same rate for FY 2013-14, which mainly affected thesentiment, a broker said.
Hike in import duty on luxury vehicles from 75 pct to 100pct and excise duty on SUV's from 27 pct to 30 pct were saidto be negative for some auto majors like Tata Motors and M&M.
Index heavyweight ITC, however, shrugged off from themarket sell-off despit raising excise duty on cigarettes to 18pct while securities transactions tax (STT) was reduced onequity futures and mutual funds, which could not able to helpto stem the downfall.
The Bombay Stock Exchange 30-share gauge resumed higherand touched a high of 19,332.28, up by almost 170 points. But,when the budget proposals filtered in, it fell back sharply tosettle at 18,861.54, a net loss of 290.87 points or 1.52 pct.
Last time, it had closed at 18,842.08 on November 27, 2012.
The 50-issue CNX Nifty of the NSE also plunged by 103.85points or 1.79 pct to end below 5,700-mark at 5,693.05, thelevel not seen since November 26, 2012.
The fall in the Sensex was the biggest in the past four years on the Budget day. Previously, it had tumbled by 869.65points or 5.83 pct on July 6, 2009.
Shares from power, banking, capital goods, metal, PSU,realty and refinery sectors suffered the most while fromconsumer durable and IT segments registered gains.
Sensex-based counters like ICICI Bank, SBI, HDFC Bank,RIL, HDFC, L&T, HUL, Tata Steel, M&M, Maruti Suzuki, TataPower, BHEL, Jindal Steel, NTPC, Hindalco and Sterlite Indclosed down between 1.99 pct and 5.80 pct. Total 363 sharessettled in their lower circuit band.
Mr. Kishor P. Ostwal, CMD, CNI Research Ltd said,"Thisbudget is realistic as no great promises were made by theHon'ble FM. Promise less and deliver more is the motto. Fiscaldeficit at 5.2 pc is below estimates. Markets will understandthis in the course of time. Any knee jerk reaction should be agood buying opportunity. It also hints at rate cut soon."
Mr. D.R. Dogra, MD and CEO, CARE Ratings & Researchsaid,"The stock market movement during the course of thespeech was indicative of a rather indifferent reaction to theBudget bordering on disappointment. While the Budget was notexpected to bring about a sea change, it was hoped that therewould be measures to spur investment. While this has been donemore on the expenditure side, by focusing on infrastructure,MSMEs and banking sector, the incentives provided for savingsand investment has been limited."
"The reduction of the STT is positive though thecommodity market will not be too happy with the introductionof CTT on non-farm products. Sectors such as power, cement,bricks, coal, electronics etc would be positively impacted,though the net impact of the higher freight rates due to therailway budget would finally determine the end impact giventhat the indirect rates have been more or less held stable.
While the market has fallen, I should think that it willrecover as it has been more or less a balanced budget, and itcould mean business as usual from tomorrow."