Markets end weak: Short term cap gain tax hiked to 15%
29 February 2008
The markets opened on weak note on the budget day and plunged in deep red once the Finance Minister started presenting the budget. Sensex and Nifty, however witnessed significant recovery in the last one hour of trade on the back of good performance of FMCG, bank, pharma and auto stocks. Finally, Sensex and Nifty ended weak.
It was bad day for the metal, realty. capital goods and oil & gas counters which traded weak through the day. Broader markets were also weak leading to negative breadth. On the volume front, it was truncated.
Sensex ended down 245.76 points or 1.38% at 17578.72, and the Nifty closed down 61.60 points or 1.17% at 5223.50. On BSE, about 1221 shares advanced, 1750 shares declined, and 73 shares were unchanged. BSE midcap and smallcap ended down 0.41% each at 7680.39 and 9628.13 respectively.
FM confidently assured that India would maintain its GDP growth at 8.8%. He added that the keeping inflation under check has been the cornerstone of the Government policy. The FM pointed out that the country has seen 8% GDP growth in 12 successive quarters.
The markets also reacted negatively as the FM has proposed to hike the short term capital gains tax from 10% to 15%. However, the brokers are expected to benefit from the proposal of STT being allowed as deductible expenditure.
Auto stocks surged today and the BSE auto index ended with 1.2% gain on the back of deduction in the excise duty from 16% to 12%. Major gainers in this space were Maruti Suzuki, Bajaj Auto and Ashok Leyland.