The air of excitement that typically surrounds Budget days on the bourses was missing this time. The signals from overseas were far from comforting on Friday morning. Continued onslaught of negative data on the US economy and the crude prices moving above $102 induced a fresh wave of selling across global equity markets on Friday. The Sensex and the Nifty opened lower in tandem.
The first jolt was received when the Finance Minister announced the proposal to waive farm loans, prompting a free fall in the price of banking stocks.
Increase in short-term capital gains tax from 10 to 15 per cent was the other proposal that did not go down well with the stock market fraternity due to the negative impact it would have on the already-battered trader sentiment. The fact that the Finance Minister failed to lower corporate tax and surcharge only added to investor chagrin and made the Sensex lose more than 500 points during the session.
The markets recovered some of the losses towards closing as the fine-print was assimilated. Both the Sensex and the Nifty closed with a marginal 1 per cent loss.
Auto Index surged higher due to excise duty cuts on automobiles. The Information technology stocks were hammered down since contrary to expectations, the STPI benefits were not extended. BSE Capital Goods Index and BSE Realty Index were the other major losers. Stocks across the board witnessed selling pressure as investors across the categories participated in beating down stock prices.
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