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Jul 07, 2009, 09.54 AM IST
Finance Minister, Pranab Mukherjee presented first Union budget of UPA government, which completely disappointed the Dalal Street. Huge selling in banking, realty, capital goods, power, metal and oil & gas pulled the Sensex below the 14,000 mark and the Nifty below 4150 level during the day.
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FM also said would continue to provide further stimulus packages; would increase investment in infrastructure to more than 9% of GDP by 2014 and ensure 4% growth for Indian agriculture. The markets expected too much and one budget was not going to address all the problems - Finance Minister said. In an interview that aired on DD Lok Sabha , he said, "The market expected too much from the FM to do by one go. That’s why I at the beginning of my speech I corrected by saying that one budget speech is not going to address all the problems and that is not the only instrument through which the problems can be solved. It can give a broad vision which we have given. These have to be followed up." Huge selling in banking, realty, capital goods, power, metal and oil & gas pulled the Sensex below the 14,000 mark and the Nifty below the 4150 level during the day. Education and textile stocks were badly hit in the midcap space. Another disheartening development: the markets tanked on huge volumes; the total turnover crossed the Rs 1 lakh crore mark. According to the provisional data available on the NSE website, FIIs were net sellers to the tune of Rs 1483.03 crore while DIIs net bought Rs 815.71 crore in equities today. Samir Arora of Helios Capital said FM has not packaged budget very well and direction on reforms could have been more forceful. Uday Kotak, VC and MD, Kotak Mahindra Bank said the markets were disappointed by the budget for the short term while Deepak Parekh (Chairman of HDFC) said the markets disappointed due to no reduction on corporate tax and no removal of surcharge on corporate tax. KV Kamath of ICICI Bank said removal of FBT and cut in surcharges were positive while budget was not best place for measures on FDI. Uday Kotak, VC and MD, Kotak Mahindra Bank said bond markets expected a lower fiscal deficit than projected (budget kept fiscal deficit target of 6.8% in FY10 versus 6.2% kept in interim budget). Corporates feel that the budget was very positive under current circumstances. Ramesh Damani, Member BSE/NSE disappointed with budget and said it lacked direction. He also said divestment target of around Rs 1,100 crore was very low and increase in MAT rate was a negative. The 30-share BSE Sensex tumbled 869.65 points or 5.83%, to settle at 14,043.40, after seeing a day's low of 13,959.44 and high of 15,097.87. The 50-share NSE Nifty closed at 4165.70, down 5.84% or 258.55 points, after hitting an intraday high of 4479.80 and low of 4133.70. Ranbaxy Labs, HUL and ITC were the only gainers on the benchmark indices. The duty on paperboard was retained at 4%, which was positive for ITC Continued on the next page... 15:01
At 14:58 hours IST - heavy sell-off in banking, realty, capital goods, metal, power and oil & gas stocks was putting enormous pressure on the benchmark indices. The Nifty slipped below the 4150 while the Sensex below the 14,000 a psychological mark. The markets' turnover crossed the Rs 1 lakh crore mark.
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