Sensex slips after budget, sheds 72.06 points
Jul 11 2014 , Mumbai
Dalal Street saw wild mood swings as finance minister Arun Jaitley unveiled his maiden budget, which the investing co-mmunity generally liked. BSE benchmark Sensex opened in the positive ter-ritory before tanking almost 500 points midway through the budget speech.
But once the contours of the document became clear, Sensex rallied to notch up a 475-point gain, only to lose ground towards the fag end of the session and end in the red.
The 30-pack bellwether closed at 25,372, down 72.06 points or 0.28 per cent. NSE’s Nifty index ended the day at 7,567.75 points, down 17.25 per cent.
Analysts said the budget had many positives and no major disappointments.
They attributed the weakness to global factors. “The correction was on account of reports about a possible default by the biggest Portuguese bank. It had nothing to do with budget announcements,” said Arvind Sethi, managing director and CEO of Tata Asset Management.
Both NSE and BSE saw record volumes in the cash market at Rs 25,924 crore and Rs 5,134 crore, respectively. The F&O segment of NSE recorded one of highest daily turnovers at Rs 4.45 lakh crore.
SP Tulsian, CEO of Premium Investments, said the budget was comprehensive and addressed all important aspects. “It has tried to draw a roadmap to achieve sustained long term growth. We believe it has met market expectations and FPIs would surely welcome it.”
Overseas funds were net buyers to the tune of Rs 161.5 crore, while domestic institutions bought stocks net of Rs 4.89 crore.
The overall market breadth was positive with 1,625 shares gaining and 1,250 declining. Midcap and smallcap indices outperformed Sensex and ended with gains. Shares of companies with interest in defence production and financial services firms with insurance subsidiaries gained, as Jaitley raised the ceiling for foreign direct investment to 49 per cent in these sectors.
Akshay Gupta, executive head for asset management and investment businesses at Indiabulls, said the budget was good and market friendly, considering that it was prepared in just 40 days.
“We believe the market will stay in the bull phase and the benchmark indices would climb 15-20 per cent by March-end,” he said.
Analysts said with the big event over, the market might turn range-bound in the short term and investors would track earning numbers for cues. But the overall sentiment should remain bullish for the medium term.
Dinesh Thakkar, chairman and managing director of Angel Broking, said the budget highlighted the new government’s rational approach to policies for taxation, spending and growth push.
“Infrastructure, real estate and financial sectors were among the biggest winners. The finance minister avoided a major spending binge and maintained fiscal prudence. Overall, the market can continue to look forward to an improved outlook for the Indian economy, which is a big positive for domestic equities,” he said.