The Hindu Business Line : Bulls take Index to new high

The bulls cheered the outcome of the Union Budget with a stunning run that saw the Sensex reaching new highs. The Budget themes of infrastructure-led and consumption-led growth boosted sentiments in the construction, engineering, cement, hotels and FMCG sectors.

Most of the sector indices gained over 1 per cent. Banking index at the NSE and the BSE alone responded with caution and made lukewarm gains.

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The buoyant buying activity continued despite a majority of the Asian markets ending in the red.

Positive breadth

The overall market breath was marginally positive with advances outnumbering declines in the ratio of 1.4:1. FII inflows continued unabated. Overseas investors were net buyers to the tune of Rs 384 crore on February 27.

Sectors that moved markets

Cement stocks evinced considerable buying interest on the back of the Finance Minister's thrust on infrastructure projects. Associated Cement surged by 9 per cent to Rs 683. Dalmia Cements, Shree Cement and Birla Corporation were others in the space that witnessed a bull run.

The Budget proposal to cut excise duty on man-made fibres and filament yarn may have aided the northward journey of a number of textile stocks. Century Textiles, Raymond, Bombay Rayon Fashions, Century Enka and Bombay Dyeing made gains in the range of 4-10 per cent.

Engineering companies making power and construction equipments responded positively to the Budget with expectations of higher order books. Bharat Heavy Electricals, Larsen & Toubro, Areva, Bharat Earth Movers and Crompton Greaves hogged the limelight throughout Wednesday's trading session.

Stock-specific action

Bajaj Auto added Rs 114 to Rs 2,715 on the back of a 30 per cent increase in its February vehicle sales.

Carmakers Maruti Udyog and Tata Motors slashed prices on their small-car models on Tuesday after announcement of an excise duty cut for the vehicles. The stocks, which rose on the same day, continued to surge on Wednesday and made gains in the range of 4-8 per cent.

IDFC witnessed a decline of 3 per cent. The removal of tax exemption for income by way of interest and dividend received from infrastructure investments may adversely impact the profitability of the company. The tax incidence of IDFC may see an increase in the coming fiscals.

Tata Steel and JSW Steel raised prices of steel on the back of a recovery in demand. The stocks gained about 2.5 per cent.

February sales of frontline stock Gujarat Ambuja Cements rose by 16 per cent. Further buoyed by the Budget proposals, the stock gained 3 per cent.

In the broad markets, Educomp Solutions, Polaris Software Lab, Shriram City Union Finance, India Cements and Jaiprakash Associates were some of the stocks that made significant gains. Trent, Madras Fertilisers, Shree Renuka Sugars, Classic Diamonds and Liberty Shoes were conspicuous losers.