Market Down After Interim Budget Announcement- Feb 16, 2009

The benchmark indices are trading with negative bias, following the global cues as most of the Asian markets are trading in the red territory, on account of shrunk Japanese economy in the latest quarter. Market sentiments turned more negative, after an announcement of, decrease in export rate to 17.1% during the first nine month of this fiscal. Among the sectoral indices, selling pressure has emerged across BSE Bankex and BSE TECk which declined by 2.23% and 1.41% respectively, whereas BSE Realty and Consumer Durable counters seen buying pressure with the increment of 1.60% and 0.74% respectively. Overall the market breadth is negative as 907 stocks are trading in red while 926 stocks are in green territory.

At 11.30 AM, the BSE Sensex declined by 157.48 points at 9,477.26 and NSE Nifty down by 49.25 points at 2,899.1. The BSE Mid Cap is trading down by 19.21 points at 2,993.74, whereas small cap is trading higher by 6.11 points at 3,401.69 respectively.

Losers from the BSE Sensex Pack are Sterlite Industries declined by (3.05%) to Rs. 267.1, along with R-Com by (2.86%) to Rs. 176.45, ICICI Bank by (2.80%) at Rs. 422.2, HDFC Bank by (2.65%) at Rs. 920.45, Bharti Airtel by (2.48%) at Rs. 636 and Ranbaxy Lab by (2.38%) at Rs. 207.

Losers from the NSE Nifty Pack are Siemens Ltd down by (4.60%) at Rs. 222.95 along with ICICI bank by (3.89%) at Rs. 417.5, Idea Cellular by (3.69%) at Rs. 49.6, Reliance Capital by (3.26%) at Rs. 419, RIL by (3.16%) at Rs. 1348.35 and SAIL by (3.14%) at Rs. 87.8.

BSE Bankex is trading on negative notes with the decline of (2.23%) or 112.28 points at 4,912.64. The top losers in the index are Axis Bank down by (3.46%) to Rs.424 along with Bank of India by (3.02%) to Rs. 244.05, ICICI Bank by (2.80%) at Rs. 422.2, Bank of Baroda by (2.75%) to Rs. 240.50 followed by HDFC Bank by (2.65%) at Rs. 920.45.

BSE Realty is trading higher by (1.60%) or 25.47 points at 1,617.83. The major gainers are Mahindra Life trading higher by (18.95%) at Rs.146.90, along with Parsvanath by (2.85%) at Rs.41.50, Orbit co by (2.18%) at Rs.56.20, Sobha Dev by (2.14%) to Rs.86.10, followed by Omaxe Ltd by (2.10%) at Rs.48.70.

Markets Open Lower, Interim Budget Eyed- Feb 16, 2009

The markets today open sharply lower on the back of weak cues from the Asian markets. Further the traders want to stay on the sidelines ahead of the keenly awaited Interim Budget. Today the interim Budget is to be presented by External Affairs Minister Pranab Mukherjee who is currently holding the charge of Finance Ministry. The budget is likely to announce some measures to reduce the impact of the global economic meltdown on the Indian economy. There are expectations that there will be a stimulus package for the export oriented sectors and some sops for the infrastructure as well.

The Realty, Auto and Consumer Durables stocks are trading higher in the opening trade. However, the Banking, Oil & Gas, FMCG, Power and Metal are witnessing selling pressure. The broader markets are however trading marginally higher in the early trade.

The Asian markets are trading mostly lower barring Shanghai Composite index which is higher by (1.32%). However the Hang Seng, Nikkei 225, Seoul Composite and Straits Times index are trading lower by (1.71%), (0.21%), (0.76%) and (0.41%) respectively. Asian markets fell after a government report showed that Japan’s gross domestic product slumped 12.7% in the fourth quarter. Japan’s economy shrank the most since 1974.

The US stock market on Friday closed lower as selling pressure emerged among the financials in the last hour of trading. This has led the Dow Jones industrial average once again close below the 8000 mark at its lowest close since last November. The US Senate has approved the USD 787 billion dollar financial stability plan to boost the ailing economy, on the same day after the House of Representatives passed it. U.S. markets are closed Monday in observance of Presidents Day. President Barack Obama will officially sign the same on Tuesday. The Dow Jones Industrial Average (DJIA) dropped by 82.35 points to close at 7,850.41. The NASDAQ Composite (RIXF) index decreased by 7.35 points to close at 1,534.36 and the S&P 500 (SPX) fell by 8.35 points to close at 826.84.

The BSE Sensex is now trading below the 9,600 mark and the NSE Nifty trading below the 2,930 mark.

DLF reported the top gainer from the BSE Sensex pack, as it is trading higher by (2.99%) at Rs. 165.40 while HDFC Bank the top loser down by (3.44%) at Rs. 913.

The overall market breadth is positive as 689 stocks are advancing while 542 stocks are declining on BSE.

At 10.30AM, the BSE Sensex was down by 86 points at 9,548.74 and the Nifty was down by 24.65 points to 2,923.70.

The BSE Mid Cap increased by 5.49 points to 3,018.44 and the BSE Small Cap grew by 22.36 points to 3,417.94.

BSE Realty index is trading higher by 26.54 points or (1.67%) to trade at 1,618.90. The top gainers are Mahindra Life increased by (6.07%) to Rs.131, Parsavnath up by (3.35%) to Rs.41.70, HDIL inclined by (2.22%) to Rs.89.60 followed by DLF grew by (2.09%) to Rs. 163.95.

BSE Bank index is trading lower by 86.85 points or (1.73%) to trade at 4,938.07. The major losers are HDFC Bank declined by (3.45%) to Rs. 912.90, AXIS Bank up by (2.66%) to Rs.427.50, SBI decreased by (2.26%) to Rs.1,167 followed by Bank of India fell by (2.01%) to Rs.246.60.

NTPC is trading lower by (0.30%) at RS. 182.35. NTPC has entered in to an MOU with Nuclear Power Corporation of India Ltd. (NPCIL) for development of Nuclear Power in India. The company for this purpose has form a Joint Venture Company for setting up Nuclear Power Projects. NPCIL shall hold 51% equity and the company will hold the balance 49% in the proposed joint nevnture.

Sensex Sheds 10% In Biggest Post-Budget Fall

The markets have posted the biggest ever post-Budget fall with the BSE Sensex and S&P CNX Nifty declining by over 10 per cent within a week of its presentation in Parliament.

In absolute terms, the 30-scrip Sensex has decline by 1,850 points and the 50-share Nifty sunk by 510 points.

Ironically, the markets had reacted sharply last year too when the Sensex declined by 900 points on global meltdown and Budget proposals to increase dividend distribution tax as well as education cess.

This was the third time under P Chidambaram as the Finance Minister that the markets have posted big declines. Chidambaram presented his first Budget on June 22, 1996 only to see the markets tank over 9 per cent a weak after the presentation.

The pro-poor Budget of 1996 introduced the minimum alternate tax (MAT) on companies and the markets took it seriously.

The current post-Budget decline is attributed, apart from the global weaknesses and selling by FIIs, to the Rs 60,000 crore farm loan waiver announcement made by Chidambaram.

The market has taken this as a setback to the banks’ financials and, therefore, hammered bank stocks by over 10 per cent. The beating that the banking sector took contributed 550 points to the 2,000-point Sensex fall in five trading days after the Budget. ICICI Bank was the worst hit, down 20 per cent on account of derivative losses by its overseas subsidiary.

Political instability played a major role in the market in 1998 when Yashwant Sinha, the then Finance Minister of the National Democratic Alliance (NDA) government, presented his Budget on June 1. The markets fell over 7 per cent a week after the Budget. Sinha apparently rubbed the markets the wrong way by presenting a swadeshi Budget with record increase in indirect taxes through hikes in custom duties.

Sinha also met with a similar fate in 2001 when he presented his fourth Budget of the NDA regime. The Sensex declined by 3.8 per cent (-125 points) a week after despite a 177-point positive closing on the Budget day.

After replacing Sinha, Jaswant Singh presented his first Budget on February 28, 2003 and the market was disappointed.

Reason: Singh had freed the shareholders of the dividend tax and levied 12.5 per cent dividend distribution tax (DDT) on the companies.

The ‘Dream Budget’ of 1997 saw the stock market recording the biggest ever post-Budget rally with the Sensex zooming by over 13 per cent or 448 points.

The 1999 reform-oriented Budget, the first full Budget of the NDA government, saw the Sensex continue with the momentum and gain 12.8 per cent or 415 points.

Consumer Durables Rally Ahead Of Budget; BSE CD Index Up 3%

MUMBAI: Consumer durables rallied Tuesday on expectation the upcoming budget will lower indirect taxes and cut customs duty on imports. At 10:32 am, the BSE Consumer Durables Index rose 2.99 per cent with Videocon Industries, up 4.99 per cent, leading advances. Blue Star (up 2.94%), Gitanjali Gems (2.59%), Titan Industries (1.82%) and Rajesh Exports (1.21%) were the other major gainers. The industry has called for reduction in value-added tax, abolition of central sales tax and cut in excise duty.

The industry has also asked the government that non-IT products like consumer electronics and entertainment should be treated at par with the IT industry regarding indirect taxes. Industry players have sought incentives for the electronic hardware sector, which is expected to reach the size of Rs 7,000 billion dollars by 2015 and contribute two per cent of the total GDP by then.