Sensex, Nifty up during the 1st week of Budget

All-round buying mainly in Auto, Fast Moving Capital Goods, Realty and Banking sectors in view of positive announcement in the Union Budget pushed up both the BSE benchmark Sensex and Nifty by 4.44 per cent during the first week of Budget.

The decision to formally introduce the constitutional amendment for GST, no increase in excise duty, allowing foreign investors to directly invest in Mutual Funds, rise in investment limit for foreign funds in corporate bonds, bringing down fiscal deficit boosted sentiments. The industry welcomed the Budget terming it as “positive” and “growth-oriented”.

The BSE benchmark Sensex recorded its highest point-wise gain after 21 months, surging over 623 points on March 1st across-the-board buying.

The BSE benchmark Sensex shot up by 785.54 points, or 4.44 per cent, to end the week at 18,486.45 from its last weekend’s level. The NSE 50-share Nifty also rose by 235.20 points, or 4.43 per cent, to end the week at 5,538.75.

Permission for foreign investors to invest in mutual fund schemes and increase in FII investment ceiling on corporate bonds announced in the Budget underpinned sentiment.

The Budget for 2011-12 proposed to cut excise duty on development and manufacturing of hybrid vehicle kits to 5 per cent from the existing 10 per cent, besides fully exempting customs and countervailing duty (CVD) on import of special hybrid parts, leading auto stocks to gain ground.

Meanwhile, food inflation declined by more than 1 percentage point to 10.39 per cent for the week ended February 19, led by a decline in prices of onions, potatoes and pulses.

Brokers also attributed rise on hopes of financial sector reforms as the Union Cabinet cleared the Banking Regulation (Amendment) Bill 2011.

Among the major indices, the BSE-Auto index shot up by 668.25 points, or 8.10 per cent, followed by the BSE-FMCG by 223.06 points or 6.79 per cent, the BSE-Realty by 121.18 points or 6.19 per cent, the Bankex by 612.36 points, or 5.18 per cent, the BSE-Capital Goods by 625.28 points, or 5.07 per cent, and the BSE-PSU by 354.15 points or 4.31 per cent.

The total turnover at BSE and NSE fell to Rs 14,445.93 crore and Rs 56,543.00 crore from its last weekend’s level of Rs 16,350.25 crore and Rs 66,987.68 crore respectively.

There were no major negative factors in the Union Budget announced by the Finance Minister and no rise in excise duty, 40K crore disinvestment in Public Sector Undertakings (PSUs) in the next fiscal year, supported the market sentiments.

Major gainers from the Sensex pack were M&M (13.64 per cent), Maruti Suzuki (12.21 per cent), ITC by (10.47 per cent), HDFC (8.77 per cent), HDFC Bank (8.41 per cent), Bajaj Auto (7.25 per cent), REL Com (6.51 per cent), Larsen and Toubro (6.46 per cent), Tata Motors (5.85 per cent) BHEL (5.57 per cent), Jaiprakash Asso (5.26 per cent), Hindalco Ind (4.92 per cent), State Bank Of India (4.90 per cent) and Sterlite Industries (4.35 per cent). However, Reliance Infra fell by 4.91 per cent and Bharti Airtel by 0.74 per cent.

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