Budget 2012-13: Sensex ends 210 pts down post Budget

The BSE Sensex dropped as much as 444 points from day's high of 17,871.00 amid huge volume on Friday, as a knee-jerk reaction to the Budget presented by the Finance Minister.

The BSE benchmark fell 209.65 points to end at 17,466.20, weighed down by 21 components. Meanwhile, the NSE benchmark fell 62.60 points or 1.16%, to close at 5,317.90.

The market was hugely disppointed as the Budget note was muted on most of the key factors like reforms and FDI. Displeased by the FM's non-action, most experts feel that Budget will be a forgotten matter soon and will follow global markets for liquidity.

Indices

Today, all sectoral indices barring auto and FMCG ended in red. The BSE Oil & Gas, Capital Goods and Power indices butchered quite badly, falling 3% each. Healthcare, Metal and Bankex tumbled 2% each while FMCG Index was up nearly 2%.

Stocks In News

Shares of cigarette major ITC rose 3.65% after excise duty hiked by 10-15%, which was as per expected by the industry. While analysing, experts said there would be an increase of 15% for ITC while 10% for other cigarette manufacturer. The hike in excise duty on beedi and other tobacco products was quite positive for the ITC.

State-owned and country's largest lender SBI fell over 3% as sector analysts feel the recapitalisation amount proposed by the government is not enough. Government proposed Rs 15,888 crore for recapitalisation of public sector banks in FY13. PNB and Bank of Baroda tanked 3-3.7%. Private sector lender ICICI Bank was down 1.4% while rival HDFC Bank fell 0.6%.

State-owned ONGC and Oil India were down 4-4.7% after cess on crude oil increased to Rs 4,500 per mn tonne from Rs 2,000. Private sector companies Cairn India was down 6% and Reliance Industries slipped 3%.

The government has now implemented Alternative Minimum Tax (AMT) for partnership firms as well. This would impact stocks like Cadila (down 5.3%) and Sun Pharma (down 7%) as they would have to pay 18.5% MAT on book profits earned for the fiscal year. This would increase their tax outgo.

State-run BHEL tumbled 3.5% as industry analysts were expecting import duty on power equipment, which did not happen. Engineering and construction major L&T dropped over 3%.

Aviation stocks too were under pressure as there no announcement on FDI. Jet Airways was down 3% and SpiceJet lost 6.6% while Kingfisher was down 0.7%. Pantaloon Retail slipped 3% as there was no clarity on FDI in multi brand retail.

Educomp Solutions and Edserv Softsystems tanked 4-6%.

Standard Chartered IDR shot up 20% amid heavy volumes post the Finance Minister proposed 2-way fungibility of IDR (Indian Depositary Receipt) in his Union Budget 2012-13. According to investopedia.com, fungibility means - cross-listed stocks are considered fungible because it doesn't matter if you purchased a share of XYZ stock in its home country or in a foreign country; it should be accepted at either location as XYZ stock.

Why was the market disappointed?

Overall three events of this month namely RBI's monetary policy review, LTRO 2 and Budget could not provide power to cross new 52-week high on the Nifty, but technical experts have a sigh of relief as it retained the 5300 level.

The market had lot of expectations like 19% hike in custom duty on power equipment, more spending on education, FDI (foreign direct investment) in aviation, clarity on FDI in multi brand retail, fuel subsidy, food security bill etc, but non of these events were on the agenda of the Finance Minister.

Even experts are worried over GDP growth target of 7.6% (which was also on expected lines) because the market did not get any indication of lowering interest rates even in April, though it is a month away event from now. The Reserve Bank of India has been trying to maintain liquidity but the industry needs a rate cut as the capital expenditure cycle has been stalled in last two years.

However, there was a sigh of relief for aam adami as the income earned upto Rs 2 lakh won't be taxed. Revised tax slabs are income between Rs 2 & Rs 5 lakh - there will be 10% tax; Rs 5-10 lakh - tax will be 20%; and above Rs 10 lakh - 30% tax.

There was good news for capital markets as well after the FM slashed securities transaction tax by 20% to 0.1% on delivery transactions.

For the week - it was fourth (consecutive) weekly loss for the market. The Sensex dropped 0.2% while the Nifty lost 0.3%. Foreign institutional investors have bought more than Rs 44,000 crore in 2012 while domestic institutional investors were net sellers during the same period, as they worried about fundamentals.

At 14:59 hours IST: Sensex loses over 150 pts; Standard Chartered shoots up 20%

The BSE Sensex fell more than 300 points from day's high while the bond 8.79% 2012 yield moved up by 0.93% to 8.44. The fall was majorly led by oil & gas, power, capital goods, metals and banks; respective indices were down 1.5-3%.

Oil & gas producers and index heavyweights Reliance Industries and ONGC dropped 2.5% & 5%, respectively.

Country's largest lenders SBI and ICICI Bank were down 2.5% and 1%, respectively. Capital goods majors L&T and BHEL slipped 2-2.7%.

The BSE benchmark was down 160 points to 17,516.01 and the NSE benchmark fell 43 points to 5,337.10.

Private steel companies Jindal Steel and Sterlite Industries tanked 3-3.7%.

However, shares of ITC and M&M outperformed others, rising 2-3%. TCS, HDFC Bank, HDFC, Wipro, DLF and Maruti were up 0.4-0.8%.

Standard Chartered IDR was locked at 20% upper circuit after the Finance Minister proposed 2-way fungibility of IDR (Indian Depositary Receipt) in his Union Budget 2012-13.

According to investopedia.com, fungibility means - cross-listed stocks are considered fungible because it doesn't matter if you purchased a share of XYZ stock in its home country or in a foreign country; it should be accepted at either location as XYZ stock.

At 14:36 hours IST: Sensex sheds 200 pts; SBI, L&T, BHEL down 3-4%

The BSE Sensex shed nearly 200 points, after huge volatility during the Union Budget speech by the Finance Minister Pranab Mukherjee. It seemed to have priced in the event completely.

The BSE benchmark tanked 194.5 points to 17,481.35 and the NSE benchmark dropped 54 points to 5,326.15.

Sun Pharma crashed 7.5% as the FM said he proposed to introduce minimum alternate tax.

ONGC fell 5.6% after cess on crude increased to Rs 4500 per tonne from Rs 2000.

State-owned and country's largest lender SBI fell 3% as sector analysts feel the recapitalisation amount proposed by the government is not enough. Government proposed Rs 15,888 crore for recapitalisation of public sector banks. PNB and Bank of Baroda too lost 1.7% each. Private sector lender ICICI Bank was down 0.5%.

Index heavyweight and India's most valued stock Reliance Industries dropped nearly 3%. Capital goods majors L&T and BHEL were down 2-4%.

However, ITC bucked the trend, rising 3% after lower than expected hike in excise duty. M&M, HDFC, Coal India, Maruti and TCS too were on buyers' radar.

At 13:56 hours IST: Sensex up 55 pts; ONGC tanks 5%, Sun Pharma tops sell list

The BSE Sensex rose about half a percent amid extreme volatility while the NSE Nifty was trying hard to hold the 5400 level. Majority of market experts feel Union Budget 2012-13 announced by Finance Minister Pranab Mukherjee is a non event for the market.

The Sensex was up 55 points at 17,730 and the Nifty rose 22 points to 5,203.

First reason is that it is not a reform based Budget due to current political conditions. Experts say, there is no announcement of fuel subsidy, fertiliser subsidy, even no FDI and food subsidy.

Chanda Kochhar, CMD of ICICI Bank says, fiscal deficit 5.1% of GDP is a positive news, but more than expected borrowing limit is negative, due to which bond yields spiked.

Market analysts too expect increase in bond yields going forward. Currently bond 8.79% 2102 yield went up by 7 basis points to 8.43.

Cigarette manufacturer ITC came off day's high as addition of advaloram duty on cigarettes may push up duty expenses further. FM raised excise duty on cigarettes by 10%. The stock was up 3%.

Private sector lenders HDFC Bank and ICICI Bank rose 1-2% while rival SBI gained 0.7%.

ONGC tanked 5% as the Finance Minister did not make any announcement about fuel subsidy sharing, which means that subsidy sharing with oil market companies will continue for the company.

Index heavyweight Reliance Industries was down nearly 2% and Sun Pharma topped the selling list, falling over 6%.

The market breadth was neutral; about 699 shares advanced while 678 shares declined on the National Stock Exchange.

At 13:16 hours IST: Sensex up 100 pts; ITC spikes 5%, auto stocks rebound

The BSE Sensex got back into consolidation phase as the Finance Minister Pranab Mukherjee ended his speech on Union Budget 2012-13. The market saw extreme volatility during the speech. Experts were mixed in their opinions over this Budget; some feel it was non-event for the market while some say, it is a realistic Budget.

Vallabh Bhansali of Enam said it was a credible budget given the current political conditions. "Fiscal deficit of 5.1% was expected. We could have seen a lot more on fiscal consolidation." He insisted that Budget will see more acceptance going forward.

According to Uday Kotak of Kotak Mahindra Bank, directionally the budget focused on importance on capital markets. FM slashed securities transaction tax by 20% to 0.1% on delivery transactions.

The 30-share BSE Sensex was up 129 points at 17,804.99 and the 50-share NSE Nifty rose 41 points to 5,421.90.

The most supportive stock for the market today was ITC, which shot up more than 5% - top gainer among largecaps. FM raised excise duty on cigarettes by 10% and advaloram duty on some cigarettes, which was on expected lines. But the hike in excise duty on beedi and other tobacco products was quite positive for the company.

For aam adami, income upto Rs 2 lakh is expected from tax. FM says, "Income from Rs 2-5 lakh - tax will be 10%; income from Rs 5-10 lakh - tax will be 20%; and above Rs 10 lakh - tax of 30%."

Even auto stocks rebounded as the FM did not mention of excise duty on diesel cars. However, Pranab hiked standard excise duty rate from 10% to 12%, which was on expected lines. Even he raised duty on large cars from 22% to 27%.

M&M shot up 4.75% while Tata Motors was up 2% and Maruti Suzuki gained 3.5%.

At 12:51 hours IST: Nifty claws back above 5400; ITC rises 4%, Manappuram falls

The BSE Sensex remained extremely choppy in trade as the Finance Minister was moving towards the end of his Union Budget Speech further. He has raised excise duty on cigarettes by 10% and advaloram duty on some cigarettes. However, ITC gained 4% as the duty hike may be lower than expected by the company. He also hiked excise duty on beedi and other tobacco products, which is positive for ITC.

Manappuram Finance was down 4% after the FM doubled custom duty on refined gold.

The BSE benchmark rose 16 points to 17,691.92 and the NSE benchmark was up 7 points at 5,387.25.

At 12:36 hours IST: Sensex falls 90 pts; FM hikes excise duty to 12% from 10%

The BSE Sensex shaved off all its gains after Finance Minister Pranab Mukherjee hiked standard excise duty rate from 10% to 12%. Even he raised duty on large cars from 22% to 24%.

Service tax increased to 12% from 10%, which will yield Rs 18,660 crore for the government, FM says.

The BSE benchmark lost 90 points to 17,585.63 and the NSE benchmark fell 22 points to 5,358.05.

At 12:25 hours IST: Choppy Sensex trades higher; FM cuts STT by 20% to 0.1%

The BSE Sensex was extremely volatile during speech by Finance Minister Pranab Mukherjee. He said the government has reduced Securities Transaction Tax (STT) by 20% on delivery transactions to 0.1%.

He set fiscal deficit target 5.1% of GDP for FY13. He, during his Union Budget Speech, said income upto Rs 2 lakh exempted from tax. "Income from Rs 2-5 lakh - tax will be 10%; income from Rs 5-10 lakh - tax will be 20%; and above Rs 10 lakh - tax of 30%."

The Sensex was up 38 points at 17,714.11 and the NSE Nifty rose 17 points to 5,397.85.

Even the market breadth improved further; about 750 shares advanced while 696 shares declined on the National Stock Exchange.

At 12:13 hours IST: Sensex turns flat; ICICI Bank, HDFC Bank, BHEL rise

The BSE Sensex was trying to stay in a positive terrain amid choppy trade, though it saw major profit booking due to fall in Reliance Industries, L&T, ONGC and Infosys. However, banks & financials and select metals stocks were on buyers' radar.

To boost infrastructure sector, Finance Minister increased limit for tax free bonds doubled to Rs 60,000 crore, which is positive for IDFC, REC and PFC.

SKS Microfinance gained 3% as FM said the government would introduce new law for microfinance companies.

At 12 hours IST: Sensex erases gains during FM speech; Reliance falls 1.5%

The BSE Sensex shed some more gains during Union Budget Speech. It gained 28 points at 17,703 and the NSE Nifty rose 15 points to 5,395.

Finance Minister Pranab Mukherjee said Coal India has been advised to sign fuel supply agreement with power plants.

The government has allowed IRFC and NHAI to raise Rs 10,000 crore each by issuing tax free bonds in FY13.

Current account deficit, he says, is likely to be at 3.6% for FY12.

Private sector lenders ICICI Bank and HDFC Bank rose 1.6% each while rival SBI gained 1.3%.

However, Reliance Industries, India's most valued stock fell 1.5%. State-run ONGC too was down 1%.

At 11:47 hours IST: Sensex off day's high; HDIL, Kingfisher move up

The BSE Sensex erased some gains as the Finance Minister Pranab Mukherjee proceeds further with his Union Budget 2012-13 speech. He says FDI in aviation is under consideration, which is positive for Kingfisher Airlines (gained 2%).

He emphasised more on allowing ECB for low cost affordable housing projects, which is positive for Housing Development and Infrastructure (rose 2%).

The 30-share BSE Sensex rose 82 points to 17,758.09 and the 50-share NSE Nifty gained 33 points at 5,413.55.

Advancing shares outnumbered declining by 945 to 487 on the National Stock Exchange.

At 11:35 hours IST: Sensex up 189 pts; IVRCL, HCC gain 4%

The BSE Sensex rallied 189 points to 17,865 as the Finance Minister Pranab Mukherjee proceeded further with his Union Budget 2012-13. He proposes Rs 16880 crore for recapitalisation of PSU banks in FY13. SBI and PNB gained 2% each.

FM expects infrastructure Investment in the 12th Plan to be Rs 50 lakh crore, which will be big boost for infrastructure sector. IVRCL, HCC, Lanco Infratech and NCC rallied 2-4%.

At 11:23 hours IST: Sensex rises 140 pts; FM targets 7.6% GDP growth in FY13

The BSE Sensex gained 140 points during Union Budget speech by the Finance Minister Pranab Mukherjee. FM targets GDP growth of 7.35-7.85% for FY13, which was expected lines. Experts had expected at 7.5-7.75%.

He said, "We will fully fund Food Subsidy act from FY13. We will bring subsidies to 1.7% of GDP in next 3 years."

The government has set Rs 30,000 crore divestment target for FY13, which is lesser than earlier targets of Rs 40,000 crore in FY12 (the government could not met this target as it raised over Rs 14000 crore so far).

The 30-share BSE Sensex rose 143 points to 17,818.37 and the 50-share NSE Nifty gained 48 points at 5,428.55.

At 11:14 hours IST: Sensex extends gains as FM begins Budget speech

The BSE Sensex extended gains as the Union Budget speech started by the Finance Minister Pranab Mukherjee. Banks, capital goods, technology and metal stocks were on buyers' radar while Reliance Industries and auto (four-wheeler) stocks were under pressure.

The BSE Sensex rose 135 points to 17,811.05 and the NSE Nifty gained 45 points at 5,425.45.

The market has been rallying on the back of strong inflow of foreign money, but at the same time domestic institutional investors were net sellers in 2012 due to lack of fundamental reasons.

Investors are looking for some strong fundamental reasons to stop selling further, feels Samir Arora, Fund Manager, Helios Capital.

He said, "Although flows may continue for sometime the fact is that our underperformance or outperformance will be governed by some fundamental reasons. Domestic investors have been sellers to the extent of USD 4 billion because domestic investors refuse to accept liquidity as a reason for buying the market."

BHEL and BGR Energy were up 2-3% as sector experts feel the government may impose import duty on power equipment.

Advancing shares outnumbered declining in the ratio of 2:1 on the National Stock Exchange.

At 11:01 hours IST: Sensex stays positive; WWIL, Hathway Cable, Dish TV up 3-5%

The BSE Sensex maintained its uptrend amid volatility ahead of Union Budget 2012-13 as majority of experts expect fiscal deficit around 4.9-5.4%. The market would react negatively if it comes above these levels.

Managing Director of Morgan Stanley Chetan Ahya tells CNBC-TV18 that the market will not be swayed by promises, but will keep an eye out for execution and how the targets are met.

Morgan Stanley expects FY13 fiscal deficit at 4.9%, but Ahya says that the key thing to watch out for is how the target is met.

The BSE benchmark rose 63 points to 17,738.79 and the NSE benchmark gained 23.6 points 5,404.10.

WWIL, Hathway Cable and Dish TV shot up 3-5% as analysts feel the government may reduce import duty on set-top box.

At 10:41 hours IST: Sensex rises 0.5%; Educomp, Edserv, NIIT spike

The BSE Sensex continued to trade higher since opening trade, rising 0.5% while the broader markets gained 0.8%. Even the market breadth too improved, which was negative in early trade, ahead of Union Budget 2012-13; about three shares advanced for every share falling on the National Stock Exchange.

Akash Prakash of Avansa Capital feels the market wants to hear fiscal deificit at 5% of GDP from Finance Minister Pranab Mukherjee.

The 30-share BSE Sensex rose 83 points to 17,758.86, supported by 21 components and the 50-share NSE Nifty rose 30.55 points to 5,411.05.

Analysts firmly believe the government may increase education spending in the Budget. Educomp Solutions, Edserv Softsystems and NIIT jumped 1.6-3%.

Fortis Healthcare rose 3% and Apollo Hospitals gained 0.7% as experts feel the FM may give infra status to healthcare sector.

At 10:23 hours IST: Nifty holds 5400; Jet Airways, Kingfisher on buyers' radar

The NSE Nifty stayed above the 5400 level ahead of Union Budget 2012-13, supported by banks & financials, capital goods, power and technology stocks. However, the fall in auto stocks and index heavyweight Reliance Industries has limited the upside.

Market experts feel Finance Minister Pranab Mukherjee will majorly focus on fiscal deficit, food subsidy bill, increase in foreign money inflow and inflation.

The BSE Sensex was up 76 points at 17,751.95 and the NSE Nifty gained 29 points at 5,409.45. The Nifty March future was trading at 5439, with 34 points premium over spot.

Aviation stocks have been on buyers' radar since yesterday as analysts feel the Pranab Mukherjee may clear long pending FDI in the sector. SpiceJet, Jet Airways and Kingfisher Airlines gained 1-3%.

Jain Irrigation and EPC Irrigation rose 3% and 7%, respectively as analysts feel the Finance Minister may focus more on agriculture sector.

At 9:50 hours IST: Sensex moderately higher; Tata Motors, Maruti drop 2%

The BSE Sensex was moderately higher in early trade amid volatility. It seemed to have priced in all negative factors like RBI credit policy, rupee depreciation and political uncertainty for the time being. Now its entire focus is on Union Budget 2012-13, though majority of experts don't expect any major reforms.

As Sandeep Bhatia, Executive Director & Head of Sales, Kotak Institutional Equities says, "expectations from Budget are very low." He expects tax rates to rise and tax exemption limits to shrink.

Fiscal deficit is very important factor in today's Budget. Consensus estimate is at around 5.1-5.4%. Bhatia says he expects 4.7% fiscal deficit announcement.

The 30-share BSE Sensex was up 48 points at 17,724.06 and the 50-share NSE Nifty gained 18 points at 5,398.45.

Banks and financials stocks like HDFC Bank, HDFC and ICICI Bank were up nearly 1% while rival SBI was up 0.5%.

State-run BHEL rose 2% while engineering and construction major Larsen & Toubro moved up 0.3%.

However, auto stocks like Tata Motors and Maruti tanked nearly 2% as experts feel there would be increase of excise duty on diesel cars. Even Bajaj Auto and Hero Motocorp were up 0.7-1%.

Index heavyweight and oil & gas producer Reliance Industries was down 1%.

The market breadth was in favour of advances; about 702 shares advanced while 346 shares declined on the National Stock Exchange.

At 9:19 hours IST: Sensex gains over 50 pts ahead of Union Budget 2012-13

The BSE Sensex opened flat on Friday ahead of the Union Budget speech by Pranab Mukherjee, but soon gained momentum and rose over 80 points. Even the NSE Nifty clawed back above the 5400 level.

Frontliners, BHEL, L&T, JP Associates, ICICI Bank, Grasim, Sterlite, SBI and Sesa Goa were on buyers' radar.

However, Tata Motors, M&M and Maruti were down 1-1.5% as market experts feel that there may be excise duty on diesel cars.

Reliance Industries and Kotak Mahindra Bank too were down.

The CNX Midcap Index was up 15 points at 7744 The market breadth was positive.

In the second line shares, HMT and ITI were up 3.5-6%.

Jain Irrigation rose 3% ahead of likely outcome on agricultural sector in the Budget.

Kingfisher was up 3% as long pending event of FDI in aviation may be cleared in the Union Budget.

Titan Industries fell 1.5% as Economic Survey pointed out some duties on gold.

Infrastructure stocks like GVK Power and GMR Infra too gained over 1%.

Education stocks like NIIT, Edserv Softsystems and Educomp Solution gained more than 1%