Budget blues: Sensex, Nifty end lower as GAAR looms

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29 February 2016

The Bombay Stock Exchange's Sensex swung widely through today's Budget announcement in parliament only to end lower.

The Sensex swung in the range of nearly 850 points in trades today and ended 152 points lower at 23,002.

The National Stock Exchange's Nifty similarly declined 43 points to close below its psychological level of 7,000 at 6,987.

Analysts rated the Budget as a mixed bag for several sectors, but the market was nervous as Jaitley announced the implementation of the controversial GAAR regime from 1 April 2017. Throughout the budget presentation, the market remained volatile and it was tough to say where it was headed.

A sharp fall in Asian markets amid a strong selloff in the Chinese market also put pressure on the domestic market. China's Shanghai Composite Index ended the day 2.86 per cent lower at 2,687.98. Japan's Nikkei share index lost 1 per cent to close at 16,026.76.

The broader market outperformed the benchmark indices with the BSE midcap index adding 0.03 per cent and the small cap index losing 0.07 per cent against a 0.66 per cent drop in the 30-share Sensex.

Consumer durables, capital goods and IT stocks were the top losers in the Sensex. In the broader Nifty50 index, auto, energy, IT and media stocks ended as worst performers. Infosys alone contributed 50 per cent of the loss in the 50-stock Nifty50 index.

Metal stocks surged as the government gave a big push to the infrastructure sector in the Budget. Tata Steel and JSW Steel surged 0.28 per cent and 2.28 per cent respectively. Cigarette stocks ITC and Godfrey Phillips staged a smart bounce-back after initially falling quite a bit following a 10-15 per cent hike in excise duty on tobacco and tobacco products in the Budget. Analysts said investors had already priced in the negatives.

The finance minister cut his public sector undertaking share sale target for the financial year from Rs69,500 crore for this financial year to Rs56,500 crore in FY18. He also proposed to trim government holding in IDBI Bank and list the public sector insurance firms.

Experts remained positive on the budget on a long-term basis. "Clearly India's big point was its macros and this budget reinforces the strong macros which India is displaying in the rest of the world. So from that point of view, it is a huge positive for the markets also," Nilesh Shah, managing director and chief executive, Envision Capital

European equity benchmarks mostly fell in early trading, with Germany's DAX tumbling 1.5 per cent to 9,369.00 and France's CAC 40 sliding 1.1 per cent to 4,266.71.





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