The Hindu Business Line : Bears run amok on Dalal Street

B-days are associated with a high degree of volatility in the Indian markets and today was no different. There was a splash of red across global market indices on Tuesday following the clampdown by the Chinese Government on illegal investment. The Indian markets, already reeling under a bout of profit-booking over the last two weeks, opened with a downward gap of over 400 points, mirroring this global panic.

Some semblance of stability became noticeable as the Budget speech got under way. Increased outlay for infrastructure, health and education in the first half of the speech spurred some buying led by the die-hard optimists.

But this fledgling recovery was brought to an abrupt end as the hike in the excise duty on cement and the revision in the taxation structure of IT companies was announced. That the Finance Minister, Mr P. Chidambaram, left the securities transaction tax (STT) and capital gains tax unchanged did little to salvage the market sentiment.

The cement and IT stocks such as Infosys, TCS, Satyam, ACC, GACL and Grasim led the post-noon slide, causing the Sensex to close with a loss of 540 points. All the Sensex components with the sole exception of ITC closed in the negative for the day.

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