Cement and IT stocks are the worst hit by the various budget proposals. All the stocks in these sectors have lost heavily as the policy changes were almost unexpected.

The excise duty structure for cement has been altered with a view to hold cement prices and control inflation. The government is clearly concerned that, because of massive infrastructure spending, cement prices may rise further and push up inflation.

Hence, the government has decided to reward those cement manufacturers who are willing to hold the price of a 50 kg bag of cement below Rs190 by offering an excise duty cut. But those who sell cement at higher prices would have to pay a higher excise duty. As cement prices are now well above Rs190 per bag and it is very unlikely that price would be lowered to those levels, cement companies would end up paying higher excise duties.

All the large cap cement stocks tumbled around 10 per cent each after the announcement, but have now come off their lows. ACC, Gujarat Ambuja Cements and Grasim are all trading with losses of more than 7 per cent each.

Among the smaller cement stocks, Kesoram is down 10 per cent while Shree Cement and Madras Cements have lost over 9 per cent each.

Technology stocks tumbled following the announcement that minimum alternate tax (MAT) would be applicable to all companies. Companies in the IT services sector who were enjoying tax benefits under sections 10A and 10B would now have to pay taxes at the rate of around 11 per cent of adjusted book profits. However, this policy change may not be applicable to companies which operate out of special economic zones.

Satyam has lost well over 5 per cent while TCS and Wipro are down around 3.5 per cent each. HCL Tech is down nearly 3.5 per cent and Infosys has lost nearly 2.5 per cent.

Polaris and Tata Elxsi are the major losers among mid-cap IT stocks.

Another major change, which is negative from the stock market perspective, is the increase in dividend distribution tax from 12.5 per cent to 15 per cent. This would lower the dividend received by shareholders.