Markets gain despite Friday’s drop on account of budget

March 1st, 2008 - 3:32 pm ICT by admin  

A file-photo of Sensex
(Weekly Review)

Mumbai, March 1 (IANS) Indian equities market ended the last week of February on a firm note even though the national budget unveiled Friday disappointed several investors and led to an intra-day fall of 1.4 percent for a key index. During the week, the market gained nearly 230 points amid volatile trade, ahead of expiry of the derivatives contracts for the month.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ended higher on three out of the five trading sessions, while the broader S&P CNX Nifty of the National Stock Exchange was up on four days.

Small-Cap and mid-cap indices were under-performers, data with the two premier bourses showed.

The main reason for the market anxiety Friday was a proposal to hike the capital gains tax on short-term investments in Finance Minister P. Chidambaram’s Union budget for the ensuing fiscal.

Investors were also disappointed that corporate tax and the rate of Securities Transaction Tax (STT) were proposed to be kept unchanged. This overshadowed the proposal to reduce central value added tax (Centvat).

As markets came to a close Friday, the 30-share Sensex had posted a weekly gain of 229.65 points, or 1.32 percent, at 17,578.72, and the broader Nifty advanced 112.75 points, or 2.20 percent, at 5223.50.

The mid-cap index of BSE rose 1.13 percent and the small-cap index was up 0.34 percent, both with gains lower than that for the Sensex.

The gains posted during the week were also on account of net investments to the tune of $546.30 million by foreign institutional investors (FIIs), showed data with the Securities and Exchange Board of India (SEBI), the markets watchdog.

Among individual stosks, Reliance Industries rose 1.17 percent at Rs.2,458.25 after the company said on Tuesday it had discovered more gas in an exploration block off India’s east coast.

Maruti Suzuki surged 13.1 percent at Rs.867.20 and Tata Motors rose 0.80 percent at Rs.700.25 in the week. Mahindra and Mahindra also advanced 10.18 percent at Rs.692.80.

But banking shares edged lower during the week. ICICI Bank slipped 0.77 percent at Rs. 1090.95 and State Bank of India lost 0.24 percent at Rs. 2109.70 HDFC Bank declined 1.46 percent at Rs.1453.45.

Similarly, mobile phone service companies also took a beating with Bharti Airtel falling 2.90 percent at Rs.825.60, and Reliance Communications shedding 1.25 percent at Rs.574.55 during the week under review.

But Reliance Power rose 3.30 percent at Rs.430.60 after its board-approved the issue of three bonus shares for every five held, to compensate for the slump in the stock price post listing.

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