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Journalism of Courage
Dalal Street retreated on Tuesday as selling pressure emerged in stocks after the Union Budget lifted the BSE Sensex sharply higher on Monday.
Selling pressure was seen almost across the board, with technology, refinery, cement and banking stocks losing ground after investors put various Budget proposals under the scanner.
After touching its lifetime high of 6,725.92 in opening trade, the 30-share Sensitive Index (Sensex) traded in the red for most part of the session, and eventually ended with a loss of 62.78 points, or 0.94 per cent, at 6,651.08. The broader 50-share NSE S & P CNX Nifty index shed 18.85 points, or 0.90 per cent, to end at 2,084.40.
While investors cheered the Union Budget 2005-06 by lifting the Sensex 144 points on Monday, a bout of profit-booking dragged down the Sensex by over 80 points at one point on Tuesday.
“The market is upset with the Fringe Benefits Tax and the withdrawal tax on bank deposits. Whatever companies gained through corporate tax cut will be offset by the tax on perks,” said a BSE dealer.
Overall, the budget has been termed as good, following a cut in corporate tax, the government’s emphasis on infrastructure and the continuation of the reforms process.
“The market is waiting for clarity on many proposals like the Fringe Benefit Tax. There’s also a demand that FM should withdraw or dilute the bank withdrawal tax,” said NSE dealer Pradip Bhavnani.
