Markets yo-yo on Budget proposals; Sensex closes 122 pts up
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Mumbai: The stock market zoomed past the 18,000-level on a slew of investor-friendly Budget proposals like higher FII investments in corporate bonds and a cut in tax surcharge, but frenetic profit-booking washed away a big chunk of gains with the Sensex closing only 122 points up.
The BSE benchmark Sensex shot up 600 points intra-day on various positives, but a rise in minimum alternate tax (MAT) dampened the sentiment.
Besides, marketmen said that investors remain concerned over rising current account deficit and high inflation.
The Bombay Stock Exchange 30-share barometer Sensex surged past the 18,000 mark to a high of 18,296.53, on proposal to cut surcharge for companies from 7.5 per cent to 5 per cent.
It, however, finished the day at 17,823.40 points, up 122.49 from its last closing.
The NSE 50-issue Nifty also closed up by 29.70 points or 0.56 per cent to 5,333.25. It logged the intra-day high of 5,477.00.
"The Budget was a mildly populist one and largely attempted to tame inflation and rein in the fiscal deficit," said Amar Ambani, Head of Research (India Private Clients), IIFL.
"The stock market reaction has been positive only because equities had factored in heavy pessimism like rise in excise duty, service tax rate and a bigger market borrowing figure. Overall a marginally positive budget, largely along expected lines," he added.
Investors were apprehensive that Budget will further roll-back the economic stimulus package but the proposals were largely positive and encouraging for the overall growth, analysts said.
"The market was extremely nervous prior to the announcement of the Budget, and was fearing a tough budget. The Finance Minister did not announce any new tax or duty, which along with plan to contain rising inflation and fiscal deficit, gave a breather to the market," said Bonanza Portfolio Head Equity Avinash Gupta.
However, a rise in MAT rate to 18.50 per cent from book profit from 18 per cent, made operators as well as retail investors to book profits at higher levels.
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