The Hindu Business Line : Budget fails to cheer D-Street

Sensex opened with a downward gap of 44.94 points at 17,779.54 while the Nifty opened flat and soon dipped into the negative area on the most awaited eventful day — Union Budget 2008.

The market was volatile before the Union Finance Minister, Mr P. Chidambaram, started reading the Budget document.

Sensex was down approximately 114 points and Nifty was down approximately 41 points from their respective previous closes. While the Finance Minister was presenting the Budget, the traders or investors were found aggressively reacting to the Budget proposals and the market indices were dancing accordingly.

After the Budget, at mid-day, the Sensex began declining, reacting to the announcement of short-term capital gains tax, which was increased to 15 per cent from 10 per cent. The Sensex lost 566 points in the afternoon to mark an intra-day low at 17,258.20. However, subsequently the market began to recover sharply from the intra-day low, taking some positive cues for the Budget.

Finally, the Sensex closed at 17,578.72, down 245.76 points or 1.38 per cent and Nifty closed at 5223.50 with a loss of 61.60 points.

Sector spotlight

Click here for table

Following the Finance Minister’s announcement that “Knowledge is Power” and the plans to allocate more for the education sector, the stocks like NIIT, Everonn Systems India gained momentum and closed positively.

Matrix Labs, Fortis Healthcare, Aurobindo Pharma and DishmanPharma were the top gainers in the Health Care Index, triggered by the increase in health outlay by 15 per cent.

However, some stocks in the pharmaceutical sector such as Glenmark Pharma, Nicholas Piramal and Sun Pharmaceutical closed with losses.

Bank stocks were choppier and the Bankex closed marginally in the green. Top gainers were Punjab National Bank, Canara Bank and SBI. Top losers are Kotak Bank, HDFC Bank and ICICI Bank.

Triggered by the announcement of excise duty cut on small cars, companies such as Maruti Suzuki, Tata Motors and M&M began to react. Top gainers in Auto Index were Ashok Leyland, Maruti Suzuki, Bajaj Auto and Hero Honda Motors.

Top losers were Apollo Tyres, Tata Motors and MRF. Excise duty on two-wheelers was cut from 16 per cent to 12 per cent.

Index Watch

Among the BSE Sectoral Indices Auto, Bankex, FMCG and Health Care Indices closed in positive territory.

Among these, Auto Index gained the maximum (1.19 per cent).

Capital Goods Index lost the most (-2.89 per cent). Other major losers were consumer durables, IT, power, reality and Teck indices.

Yoganand D.

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