The Hindu Business Line : Market moves up; STT hike no dampener

Poor show
Public sector banks fared poorly at the bourses as the Finance Minister's proposal to extend credit to farmers much below the market rate at 7 per cent was seen as one that would erode their profitability.
Market ex perts opine that there are unlikely to be any Budget related falls in the market.
The 30-stock benchmark index gained 88.15 points over Monday's closing figure.

Mumbai , Feb. 28

With no "unpleasant surprises" in the Budget, relieved domestic bourses recorded a new high on Tuesday.

With the Finance Minister announcing no changes in the corporate taxes, aided by optimistic predictions in economic growth, sentiment in the stock markets continues to be positive.

Even the 25 per cent increase in the securities transaction tax was not a market dampener today.

The Sensex demonstrated some volatility but stayed largely green during the Budget speech.

It zoomed up subsequently and touched its highest-ever level of 10,422.65 before shedding some to end at 10,370.24, another record close.

Overall, the 30-stock benchmark index gained 88.15 points over Monday's closing figure.

Nify touches a new high

On the NSE, the Nifty also moved in unchartered territory, touching an intra-day high of 3,090.30 before closing at 3,074.70.

BHEL, ACC and Grasim were the big winners among the Sensex stocks today, with the Budget's focus on infrastructure development. Agriculture and automobiles were the two other hot sectors. BHEL added Rs 112.25 to end trade at Rs 2,026.20, while ACC gained 5.24 per cent to close at Rs 627.70 and Grasim moved up 4.43 per cent to close at Rs 1,742.45.

"Anything that has a flavour of agriculture is expected to do well now. Companies in packaged food industry and others will be the focus of the market now," said Mr Roop Chand Betala, Betala Stock Broking.

Poor show by PSBs

Public sector banks fared poorly at the bourses as the Finance Minister's proposal to extend credit to farmers much below the market rate at 7 per cent was seen as one that would erode their profitability. State Bank of India shed 1.55 per cent to close at 877.20 and Punjab National Bank lost 2.87 per cent to close at Rs. 441.30.

`No Budget-related falls '

Market experts opine that there are unlikely to be any Budget related falls in the market.

However, a healthy correction is anticipated. "On a five-year view or a three-year view of the markets, there is no better investment than equities. On the short-term however, we hope there is a 5-10 per cent correction," said Mr Ved Prakash Chaturvedi, Managing Director, Tata Asset Management.

Analysts predict that there would be liquidity related highs in the market. Money raised by FIIs and mutual funds has been waiting at the sidelines to avoid Budget related volatility.

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