Markets cheer budget,adds 175 points

Markets awaiting with bated breath for a clear direction in the Budget proposals,leapfrogged within seconds of Mukherjee announcing that fiscal deficit would be contained at 5.5 per cent of the GDP in the next fiscal. The barometer index kept shooting up as Mukherjee continued with speech and investors even ignored a 2 per cent hike in MAT.

8220;The two per cent hike in MAT will not have much impact profitability of companies as surcharge on corporate tax has been reduced to 7.5 per cent from 10 per cent,8221; India InfoLine Vice-President,Research,Amar Ambani,The market could not sustain the eraly gains with investors booking profit ahead 3-day long week end,marketmen said adding that the trend would be positive in the coming days.

However in the hike in MT was not taken lightly by the IT sector as non of the major IT stocks barring Wipro closed in the green today.

On the last Budget,the Sensex had tumbled by a whopping 869.65 points or 5.83 per cent.

The broader 50-share Nifty of the National Stock Exchange also rose by 62.55 points or 1.29 per cent to 4,922.30 from 4,859.75 on Thursday.

The Sensex shot up to a five-week high of 16,669.25 points following reduction in surcharge on corporate tax to 7.5 per cent from 10. Another booster dose was the increase in the income tax slabs,which would leave more money in the hands of the salaried and self-employed.

However,later it turned somewhat weak after the Budget hiked the peak excise duty rate to 10 per cent from 8,a first step towards rolling back the fiscal stimulus package. Some other counters also suffered a setback as the excise duty on petrol and diesel raised by a rupee a litre,which also capped more gains.

The Budget also pegged the fiscal deficit at 5.5 per cent of GDP for 2010/11,lower than the estimated 6.5 per cent for the current fiscal year.

Analysts are of the opinion that the Budget has set the tone for the market and would surge in the coming days,when it opens next week after a three-day hiatus on Tuesday.

On the post-Budget rally,an analyst at Anand Rathi brokerage said,8221;today8217;s huge volume indicates a turnaround in the market trend. After Holi it can give you a sense of Diwali,as many stocks may see renewed buying.8221;

On the weeks ahead for the markets,India Infoline vice president Amar Ambani said,8221;the market will remain in the positive zone in the first half of next week as there is a lot to read into the details of the Budget papers. As of now the Budget looks good for the markets.8221;

Angel Broking chairman and managing director Dinesh Thakkar also echoed similar views saying 8220;the Budget is overall good for investors as it could break the weeks of range-bound movement8221;.

Among the BSE sectoral indices,Auto rose by a huge 324.33 points or 4.74 per cent,followed by Metal by 411.75 points or 2.58 per cent,Bankex by 217.10 points or 2.26 per cent,Healthcare by 75.16 points or 1.55 per cent and Realty by 40.35 points or 1.26 per cent.

From the Sensex pack,Tata Motors zoomed 6.33 per cent,Hindalco by 5.39 per cent,Mamp;M by 5.06 per cent,Hero Honda by 4.99 per cent,Reliance Infra by 4.67 per cent,Maruti Suzuki by 4.46 per cent,Sterlite by 3.97 per cent,SBI by 3.21 per cent,DLF by 2.73 per cent,ICICI Bank by 2.40 per cent and Jaiprakash Associates by 2.20 per cent.

However,ITC tanked by 6.17 per cent and Tata Power by 4.12 per cent.

Total market breadth was positive as 1,848 shares ended with gains while 942 shares finished with losses on the BSE.

Total volume rose to Rs 5,384.54 crore from Rs 3,111.32 crore on Thursday. Reliance Capital was the volume grosser with Rs 304.85 crore followed by SBI Rs 210.14 crore,

Ranbaxy Rs 162.97 crore,DLF Rs 150.97 crore and HDIL Rs 134.68 crore.