Stock market will welcome budget: Astromoneyguru

As per CEO Ajay Jain of www.astromoneyguru.com , as I have predicated about Union budget 2011-12 almost all expectations were proved - income tax, agriculture, infrastructure, educations, housing sector, senior citizen etc. As i said that stock market traders and investors will welcome budget , during budget sensex has been show 500 points up . But intraday traders have book profit also on higher levels. Now Sector and stock wise post budget impact are as follow.

Automobile: Budget is positive for the Automobile sector as the central excise duty has been kept unchanged. Further, special incentives have been announced for companies manufacturing hybrid vehicles in India. Moreover, broader measures like increased focus on rural and infrastructure spending would support long term growth of the sector. Positive movement in Tata motors, Mahindra & Mahindra may be seen

Banking and Insurance: - Budget is positive for banking sectors especially new banking policy likely to declare providing opportunity for banking sector in country. Reliance Capital, IFCI, L&T are companies keeping eyes on this announcement. Direct investment in Mutual funds by FIIs is also good for Indian stock market. Positive for State Bank of India, ICICI Bank and other PSU banks

IT: The budget has given wonderful opportunity to IT education but did not mention extension of fiscal benefits under the STPI Scheme for export of software services, which is due to expire in FY2011. Special allocation for School Education increased 24% to Rs 52,057 crore in FY2011-12. This would boost for the IT-Education companies like ICT and PPP in K-12, Educomp, Everonn and NIIT. Overall, the budget was neutral for IT sector.

Infrastructure: Budget continued to focus on infrastructure development, as the allocation for the sector has been increased by 23% yoy to Rs 2,14,000 crore which is 48.5% of the planned expenditure. Further, steps like tax free infra bonds worth Rs 30,000 crore by various government undertakings, creation of infra debt funds are positive for the sector. Also, MAT rate has been hike from 18% to 18.5% which would nullify the benefit from surcharge reduction from 7.5% to 5%. The tax benefit under Section 80IA and Rs 20,000 investment in Infrastructure Bonds has been extended by one year. Positive for GMR Infra, JP Infra etc

Metals & Mining: Export duty on export of iron ore has been raised to ad valorem 20% on lumps as well as fines. Currently, lumps are taxed at 15% and fines are taxed at 5%. This is negative news for iron ore exporters such as Sesa Goa (90% of total sales from exports) and NMDC (15% of total sales from iron ore exports). While no imposition of mining tax (26% at PBT) is a positive for mining companies as well as steel companies with captive mines.

Pharma: The Budget is neutral for the pharmaceutical sector. Allocation to Ministry of Health & Family Welfare have been increased by 20% to 26,760 crore for FY2012 from Rs 22,300 crore. There was no extension provided on the weighted deduction on the in-house R&D which stands at 200% and available till FY2012 only, this is disappointment for the Pharma companies actively involved in R&D activities. Although MAT has been increased to 18.5% from 18%, it would be totally nullified by the decrease in the surcharge to 5% from 7.5%. MAT levied on the SEZ developers would impact the companies that were placed to benefit from the same. There were no indications on the extension of the EOU benefit which is available only till FY2011, This is also negative for the sector, especially companies that have been not or have been slow in expansion through SEZ.

Capital Goods: The Budget did not give any direct signals for the Capital Goods sector; it sent a positive signal with regards to the continued impetus being provided to the Infrastructure and Power Sector of the country. . If we look at specific demand by BHEL and L&T to increase import duty on foreign equipment, which cited the lack of a level playing field for domestic manufacturers, the Finance Minister has ignored the same and kept the rates unchanged. However, parallel excise duty exemption for domestic suppliers producing capital goods needed for expansion of existing mega or ultra mega power projects have been granted

Keeping in view that budget is for every one not only for trade and Industries , This budget will be known for "Budget for AAM ADMAI "  or Budget for common man as predicated well in advance . It is also to note since crude oil prices are at peak, Inflations rates also on the top, Geo political tension is also mounted  all over world . What more one can expect under such situation from Finance minister.

Disclaimer: The views and investment tips expressed by investment experts/astrologers on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.