Budget fails to boost market, Sensex ends 291 points down below 19k - The New Indian Express

Budget fails to boost market, Sensex ends 291 points down below 19k

Published: 28th February 2013 09:57 AM

Last Updated: 28th February 2013 05:34 PM

The budget proposals failed to boost the market sentiment due to lack of major incentives for the corporates as the Sensex today tanked by almost 291 points to end below 19K-mark after three months at 18,861.54, despite positive global advices.

Profit-booking on the last day of the expiry of February also weighed on the market.

Finance Minister P Chidambaram presenting its eighth annual budget in Parliament today raised surcharge on domestic companies to 10 pct from 5 pct whose income exceeds Rs 10 cr and also increased surcharge on dividend distribution tax as the same rate for FY 2013-14, which mainly affected the sentiment, a broker said.

Hike in import duty on luxury vehicles from 75 pct to 100 pct and excise duty on SUV's from 27 pct to 30 pct were said to be negative for some auto majors like Tata Motors and M&M.

Index heavyweight ITC, however, shrugged off from the market sell-off despit raising excise duty on cigarettes to 18 pct while securities transactions tax (STT) was reduced on equity futures and mutual funds, which could not able to help to stem the downfall.

The Bombay Stock Exchange 30-share gauge resumed higher and touched a high of 19,332.28, up by almost 170 points. But, when the budget proposals filtered in, it fell back sharply to settle 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 103.85 points or 1.79 pct to end below 5,700-mark at 5,693.05, the level 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 869.65 points or 5.83 pct on July 6, 2009.

Shares from power, banking, capital goods, metal, PSU, realty and refinery sectors suffered the most while from consumer 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, Tata Power, BHEL, Jindal Steel, NTPC, Hindalco and Sterlite Ind closed down between 1.99 pct and 5.80 pct. Total 363 shares settled in their lower circuit band.

Mr. Kishor P. Ostwal, CMD, CNI Research Ltd said,"This budget is realistic as no great promises were made by the Hon'ble FM. Promise less and deliver more is the motto. Fiscal deficit at 5.2 pc is below estimates. Markets will understand this in the course of time. Any knee jerk reaction should be a good buying opportunity. It also hints at rate cut soon."

Mr. D.R. Dogra, MD and CEO, CARE Ratings & Research said,"The stock market movement during the course of the speech was indicative of a rather indifferent reaction to the Budget bordering on disappointment. While the Budget was not expected to bring about a sea change, it was hoped that there would be measures to spur investment. While this has been done more on the expenditure side, by focusing on infrastructure, MSMEs and banking sector, the incentives provided for savings and investment has been limited."

"The reduction of the STT is positive though the commodity market will not be too happy with the introduction of 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 the railway budget would finally determine the end impact given that the indirect rates have been more or less held stable.

While the market has fallen, I should think that it will recover as it has been more or less a balanced budget, and it could mean business as usual from tomorrow."

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