Market manages a positive close on Budget trading session after extreme volatility

The special trading called by the marketmen on the Budget day was extremely volatile and at one point of time seemed not going down well with the major bourses tanking by about half a percent after showing gains of around a percent in earlier deals. The Finance Minister pegging fiscal deficit target for FY16 on higher side at 3.9 per cent versus 3.6 per cent earlier, was one of the major factor taking the markets lower for the day. However, things improved in the latter part of the day and traders after analysing the budget impacts, went for selective buying taking the markets to a respectable high.

There was not much cues from the global markets except the closing views of the US markets overnight. However, traders seemed completely ignoring the decline in the US markets and rather taking cues from the European markets which had ended higher ahead of the launch of the European Central Bank's quantitative easing program.

Different announcements of the Union Budget kept guiding the market movements for the day. The budget 2015-16 was a mixed bag for the corporate, as the rate of corporate tax was announced to be reduced to 25% over next four years, while it was announced rationalize & remove exemptions for corporate over four years. Also, the Service tax increased to 14 per cent. Sectorally, as expected infra received the major thrust, Rs 25,000 crore has been allotted for Rural Infrastructure Development Bank, Rs 5,300 crore to support Micro Irrigation Programme, Tax-free bonds for projects in rail road and irrigation, setting up 5 ultra mega power projects, each of 4000MW, Rs 75 crore for electric cars production. As on whole Rs 70,000 crores has been alloted to Infrastructure sector. The disappointment was for the middle class income tax payers as the FM proposed no change in the rate of personal income-tax. Instead proposed to levy a surcharge at the rate of 12% on  individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative  societies and local authorities having income exceeding Rs 1 crore. There were some indirect measures announced for the tax savings, through which the FM said that an individual can achieve exemption of upto Rs 4,44,200.  Back on street, while the benchmarks bounced back, the broader indices were not that lucky and they made a mixed closing. However, the remarkable point of the trade was Nifty closing at its one month high. Sectorally, banks were in most jubilant mood with budget target of Rs 8.5 lakh crore of credit during the year 2015-16.Healthcare, oil & gas, IT and technology sectors moved higher on supportive announcements, while FMCG, Consumer Durables, power and realty suffered profit booking, on some rise in excise duty and service tax. Jewellery stocks erased initial gains lacking any announcement on reduction of import duty on gold.

The NSE’s 50-share broadly followed index Nifty surged over fifty points to cross the crucial psychological 8,900 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex – gained over 140 points crossing to 29,400 mark. Broader markets underperformed the benchmarks and made a mixed closing on BSE.

The market breadth remained in favour of decliners, as there were 1498 shares on the declining side against 1230 shares on the gaining side, while 141 shares remained unchanged.

Finally, the BSE Sensex gained 141.38 points or 0.48% to 29,361.50, while the CNX Nifty ended with gain of 57.25 points or 0.65% to 8,901.85.

The top gaining sectoral indices on the BSE were Bankex up by 3.27%, Auto up by 1.08%, Oil & Gas up by 0.87%, IT up by 0.76%, TECK up by 0.53%, while FMCG down by 4.09%, Consumer Durables down by 2.05%, Power down by 1.15%, Realty down by 0.90%, INFRA down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 8.15%, Sun Pharma Inds. up by 3.62%, Tata Motors up by 3.15%, ICICI Bank up by 3.15% and Dr. Reddys Lab up by 2.82%. On the flip side, ITC down by 8.27%, BHEL down by 3.21%, NTPC down by 1.64%, Hindalco down by 1.39% and HDFC down by 0.81% were the top losers.

The CNX Nifty touched a high and low of 8751.35 and 8941.10 respectively. There were 37 stocks on the advancing side against 13 stocks on the declining side on the index.

The top gainers on Nifty were Axis Bank up by 8.01% and Indusind Bank up by 6.02% and Kotak Mahindra Bank up by 4.43% and Sun Pharma Inds. up by 3.65% and ICICI Bank up by 3.25%. On the flip side, ITC down by 8.22%, BHEL down by 3.23%, NMDC down by 2.73%, NTPC down by 1.61% and Hindalco down by 1.48% were the top losers.