Nifty nears 7150, Sensex zooms over 500 pts; HUL, ONGC down

Moneycontrol Bureau10:55 am Market Update: The Sensex rose 494.78 points or 2.15 percent to 23496.78 and the Nifty climbed 151.40 points or 2.17 percent to 7138.45.About four shares advanced for every share declining on the BSE.10:50 am Ambit on Budget: Ambit says even relative to the low expectations that had been created coming into Budget day, the FM delivered an underwhelming budget that disappointed on several fronts, most notably by changing the focus of spending growth from plan to non-plan spending and by not providing extra funds for a PSU bank recap.Most ambitious aspect of the budget is 3.5 percent budget deficit number. "Given that the FM announced a 10.8 percent rise in spending, for the FM to deliver a 3.5 percent deficit he will need 16 percent total receipts growth in FY17. That appears to us to be a tall order," it says. 10:45 am Interview: The Union Budget 2016 imposed a one percent tax deducted at source (TDS) on passenger vehicles costing more than Rs 10 lakh. A 1-4 percent infrastructure cess has also been imposed on PVs. The infrastructure cess will be a burden to growth, especially look at the current volatility in the market, says RC Bhargava, Chairman of Maruti Suzuki. “No company has yet made a decision whether they (companies) will pass on or absorb the entire the amount or part of amount,” he says adding that the “companies will pass the entire burden of (infra) cess to the customers.” Taxes and cesses will be passed through all models, he adds.10:40 am ITNL wins order: IL&FS Transportation Networks in joint venture with Elsamex SA, a wholly owned subsidiary of the company in Spain had submitted the bid to the Ethiopian Roads Authority, Federal Republic of Ethiopia for design, improvement works and management and maintenance services of (i) Nekempte - Anger Gutin-Andhode Road Section (86.10 km) and (ii) Agamsa-Bure Road Section (84.56 km) on an output and performance based road contract (OPRC).

The Director General, Ethiopian Roads Authority has awarded this projects for development to joint venture for a period of 8 years.

Project is funded by the World Bank and the estimated total contract value is USD 223 million (approximately Rs. 1524.76 crore).10:35 am Manufacturing PMI: Manufacturing business conditions in India continued to improve, with new orders, exports, output and purchasing activity all rising in February, according to Nikkei Markit report.At 51.1 in February, unchanged from January’s reading, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) – a composite single-figure indicator of manufacturing performance – pointed to a second consecutive monthly improvement in business conditions across the sector.However, a faster expansion in new business inflows failed to lift growth of output and workforce numbers were left broadly unchanged again, the report says, adding PMI data also highlighted a weaker rise in costs and the first reduction in selling prices since September 2015.10:30 am Piramal's acquisition: Piramal Enterprises' step-down wholly owned subsidiary in the USA, Decision Resources Group, today announced acquisition of all of assets of Adaptive Software, LLC and entire control & ownership of its wholly owned subsidiary, AdaptiveRx LLC on February 29.10:25 am Market Expert: S Nagnath of DSP BlackRock Investment says fiscal deficit has been maintained on expected lines and spending on rural infra isa positive step.

He expects rural demand to pick up on expectations of a good monsoon and spur in rural demand will boost economy.

According to him, period of global volatility is behind behind us and consumption engine will accelerate going forward.

He feels downside for the market capped at 6800-7000 on the Nifty.10:20 am Prabhudas Lilladher on Budget: Despite formidable challenges emanating from a sharply lower nominal GDP growth in FY16, fragile global economy and ballooning of expenses as a result of VII pay commission award & OROP, the Finance Minister (FM) has done an admirable job of containing fiscal deficit to 3.9 percent of GDP in FY16 and holding steadfast to his medium-term fiscal consolidation roadmap of 3.5 percent in FY17 and 3 percent in FY18.This adherence to fiscal rectitude would allay apprehension among investors who feared that any fiscal slippage would lead to a spike-up in government’s borrowing program and impact RBI’s decision in lowering rates. 10:15 am FinMin to clarify on EPF's tax: Facing wrath from all quarters after Finance Minister Arun Jaitley announced that 60 percent of the employee contribution to Provident Fund will be taxed on withdrawal, Minister of State for Finance Jayant Sinha said a clarification will be issued soon.

"We have noted concerns about changes in tax treatment. Full clarification with FAQs will be issued shortly. Have proposed prospective changes in Budget. Existing savings are not impacted in any way," Sinha said.

As per the Union Budget announced on Monday, the contributions made on or after April 1, 2016 by an employee participating in a recognised provident fund and superannuation fund, up to 40 percent of the accumulated balance attributable to such contributions on withdrawal shall be exempt from tax.

Any payment in commutation of an annuity purchased out of contributions made on or after April 1, 2016, which exceeds 40 percent of the annuity, shall be chargeable to tax.

10:10 am Nomura on Budget: The bond market yesterday saw its biggest rally in nine months after the Finance Minister announced in the Budget that the government would stick to its fiscal consolidation plan.In a single day, the yield on the 10-year g-sec fell from 7.78 percent to 7.62 percent, triggering a major rally in prices. (Bond prices and yield are inversely related.)However, Vivek Rajpal, India Fixed Income Strategist at Nomura India, believes that while the bond market will take a breather following yesterday's rally, a rate cut by the Reserve Bank of India (RBI) could spart one more leg-up.“We are likely to get another leg-up, probably another 10 basis point [down for the 10-year] if we get 25 basis point cut [from the RBI],” he told CNBC-TV18.10:05 am L&T bags order: L&T Construction, the brand of Larsen & Toubro, has won orders worth Rs 2,213 crore, including road orders from National Highways Authority of India (NHAI) in Tamil Nadu.

"Transportation infrastructure business has bagged orders worth Rs 1,078 crore from NHAI for construction of the Kerala/TamilNadu–Villikuri -Kanyakumari sections of NH-47 and NH-47B under NHDP Phase-3 in Tamil Nadu on EPC mode," says L&T.

Projects are scheduled to be completed in 24 months and involve cumulative construction of 69.9 Km of four lane dual carriage way with concrete pavement.Also read - By sticking to fiscal, FM preserved his ammunition: Ridham Desai10:00 am Market Check

The market is on a roll as bulls celebrate, Budget proposals by Finance Minister Arun Jaitley, in style. The Sensex is up 528.38 points or 2.3 percent at 23530.38, and the Nifty is up 157.65 points or 2.3 percent at 7144.70. About 1357 shares have advanced, 304 shares declined, and 62 shares are unchanged.

ITC, ICICI Bank, Axis Bank, GAIL and Hero MotoCorp are top gainers while ONGC, HUL, HDFC and Dr Reddy's Labs are losers in the Sensex.

Gold rose for a second straight session on Tuesday as global economic concerns spurred safe-haven demand and assets in the top bullion fund reached the highest since 2014.Asian shares rose slightly in early trade on Tuesday, with sentiment bolstered by China's easing move and gains in oil prices but also constrained by lacklustre US and European data that kept concerns about global growth momentum alive.