Markets sink into red terrain; as Budget 2012-13 fails to underpin sentiments

Indian stock markets have plunged a great deal from the high point of the day in early hours of Friday afternoon session as Union Finance Minster continued to divulge the details of Union Budget 2012-13. Just when it looked like the benchmark equity indices would sail beyond the psychological 17,900 (Sensex) and 5,450 (Nifty) levels, sentiments got spooked as Pranab Mukherjee announced hike in Service taxes, raising it to 12% from 10% earlier. However, the key gauges have found some support around the 17,500 (Sensex) and 5,350 (Nifty) levels and have started to prune the losses. Hefty profit booking was evident in Oil & Gas counter which plunged close to two percent while the Consumer Durables and Capital Goods pockets too traded with notable losses. On the other hand, the investors piled up positions in defensive FMCG and Healthcare counters. While the rate sensitive sectors like Realty and Bankex which got pounded in previous session gained some traction. Moreover, the broader markets too traded on flat note. The bourses dived on good volumes while market breadth on BSE was in favor of declines in the ratio of 1315:1243 while 116 scrips remained unchanged.

The BSE Sensex is currently trading at 17,600.42 down by 75.43 points or 0.43% after trading as high as 17,871.00 and as low as 17,534.65. There were 11 stocks advancing against 19 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was marginally up by 0.05% and Small cap sank 0.11%.

On the BSE sectoral space FMCG was up by 0.59%, Healthcare up by 0.37%, Bankex up by 0.08% were the lone gainers, while Oil & Gas down by 1.89%, Consumer Durables down by 1.60%, Consumer Goods down by 0.81%, Metal down by 0.72%, Power down by 0.62% were the major losers in the space.

Coal India up by 1.86%, ITC up by 1.77%, M&M up by 0.90%, BHEL up by 0.85%, Wipro up by 0.69%, were the major gainers on the Sensex, while Jindal Steel down by 2.86%, RIL down by 2.41%, ONGC down by 2.04%, NTPC down by 1.81%, Sterlite Industries down by 1.57% were the major losers in the index.

Meanwhile, finance minister Pranab Mukherjee announced a Rs 1,00,000 crore increase in the agriculture credit target to Rs5,75,000 for the next fiscal and raised the outlay for farm sector by about Rs3,000 crore. 'Agriculture continues to be a priority to the government. The total plan outlay for agriculture and cooperation has been increased by 18% from Rs17,123 crore in 2011-12 to Rs20,208 crore in 2012-13,' Mukherjee said in his Budget speech.

The allocation for scheme Bringing Green Revolution in Eastern India was also increased by Rs600 crore to Rs1,000 crore in next fiscal considering the success of the programme that led to an additional paddy production of 7 million tonne in the Kharif season of 2011-12 crop year. The allocation for Rashtriya Krishi Vikas Yojna (RKVY) was also increased by 17% to Rs 9,217 crore. Farmers need timely access to affordable credit. It is proposes to raise the target for agricultural credit in 2012-13 to Rs 5,75,000 crore. This represents an increase of Rs1 lakh core.

The credit target for this fiscal has been set at Rs 4,75,000 crore. During April-November period, credit worth Rs 2,94,023 were disbursed by banks to farmers, according to data provided by Economic Survey. The outlay for Rashtriya Krishi Vikas Yojna is being increased from Rs7,860 crore in 2011-12 to Rs9217 crore in 2012-13.

The S&P CNX Nifty is currently trading at 5,384.65, up by 4.15 points or 0.08% after trading as high as 5,445.65 and as low as 5,340.90. There were 24 stocks advancing against 26 declines on the index.

The top gainers on the Nifty were ITC up by 7.28%, M&M up by 2.65%, IDFC up by 2.45%, Coal India up by 1.89%, JP Associates up by 1.53%.

Jindal Steel down by 3.30%, NTPC down by 2.42%, ONGC down by 2.16%, Reliance Industries down by 2.10%, Siemens down by 1.76% were the major losers on the index.

In the Asian space, Hang Seng shed 0.10%, Jakarta Composite fell 0.26%, KLSE Composite eased 0.02%, Straits Times declined by 0.18%, Seoul Composite inched down 0.46% and Taiwan Weighted fell 0.82%.

On the other hand Shanghai Composite inched up 1.30%, Nikkei 225 gained 0.06%