Nifty above 5400, cheers Union Budget 2011

Indian equity benchmarks gained further in afternoon trade - the Nifty has touched the 5400 level, reacting positively to Union Budget 2011-12, wherein Finance Minister Pranab Mukherjee has announced measures to improve economic growth and targets lower fiscal deficit in FY12 over FY11.

FM sees FY11 fiscal deficit at 5.1% and FY12 fiscal deficit at 4.6%. "FY12 fiscal deficit will be at Rs 4.12 lakh crore." 4.6% fiscal target looks very ambitious at this point, says Punita Kumar Sinha, Sr Managing Director, The Black Stone Group.

Indian economy got back to pre-crisis growth trajectory and services sector continues to grow near double digits. However, he sees food inflation still a concern. "Food inflation is at 20.2% in February." He said, "Stronger fiscal consolidation is needed. We need to ensure sustained private investment and need to improve supply of agriculture to meet demand."

Pranab says, FIIs are allowed to invest in corporate infra bonds and QFIs allowed to invest in MF schemes. "We will also allow FDI in MFs," he said.

Madhu Kela, Chief Investment Strategist, Reliance Capital Ltd feels that foreign investment in equity MFs is positive for markets. "We will have to see details of FII investment into MFs." He expects strong fund flows in the next 12-36 months into MFs.

In the case of direct tax, FM said would raise personal tax exemption limit to Rs 1.8 lakh and create `5 lakh exemption limit for citizens above 80 yrs.

The 30-share BSE Sensex was trading at 18,081, up 381 points and the 50-share NSE Nifty surged 112 points to 5,415.

ITC was the biggest gainer with 8% rally as there was no additional tax on cigarettes. HUL rallied 3% and Nestle rose 1.5%.

Oil & gas, infrastructure, financial, realty, technology and auto companies' shares were leading the markets higher. However, Sesa Goa tanked owing to export duty hike to 20%.

Ranbaxy Labs, Hero Honda, GAIL, Ambuja Cements, Reliance Infra, ACC and Tata Power were only losers on Nifty 50.

In midcap space, Sadbhav Engg, TVS Motor, IVRCL Assets, Anant Raj Inds and GVK Power rallied 7-10% while Vardhman Text, Kansai Nerolac, Patel Engg, Coromandel Intl and Glenmark lost 3-4%.

In smallcap space, OCL India, Ruchinfra, Gabriel India, Lok Housing and Aditya Birla jumped 8-12% whereas Hindustan Media, Parrys Sugar, Parenteral Drug, AGC Networks and Bheema Cements fell 5-8%.

_PAGEBREAK_

Budget 2011; Sensex maintains gains

Finance Minister Pranab Mukherjee' Union Budget 2011-12 was supporting the Indian equity benchmarks. The Nifty gained 62 points at 5,365 and the Sensex rallied 216 points to 17,917.

Export duty is set at 20% for iron ore (negative for NMDC & Sesa Goa) and basic customs duty on pet coke and gypsum will be reduced to 2.5% from 5% (Positive for cements), FM said.

"Stainless steel scrap exempted from basic customs duty and cut customs duty on yarn to 5% from 7.5%. export duty on iron ore pellets withdrawn," he said.

_PAGEBREAK_

Sensex choppy; MAT rate raised from 18% to 18.5% in budget

The 30-share BSE Sensex regained further amid extreme volatility after announcement of direct tax by Finance Minister Pranab Mukherjee in his Union Budget 2011-12 speech.

FM said exemption limit for general tax payers raised to Rs 1.8 lakh from Rs 1.6 lakh and qualifying age for senior citizens reduced to 60 vs 65. For the companies, the government has reduced current surcharge of 7.5% on domestic companies to 5% and proposed to levy MAT on developers of SEZ