The Hindu Business Line : Volatile stocks, unaffected Sensex

STOCK prices witnessed see-saw movements today even as stockbrokers and analysts said that the Jaswant Singh Budget is growth-oriented and market friendly.

Brokers said the proposals mooted by Mr Singh would attract more funds to the capital market despite a sensitive geo-political situation across the globe. The stock market opened strong in the morning ahead of the Budget but as the Finance Minister started his speech, share prices started fluctuating.

The BSE Sensex opened higher at 3,294.60, touched day's high of 3,316.74 and closed at 3,83.66, up 6.32 points. On NSE, S&P CNX Nifty gained 10.45 points to close at 1,063.40. The Nifty index gained more than Sensex as technology stocks gained sharply. Increased interest in technology stocks was also seen from the rise in BSE IT index, which rose 61.86 points (4.29 per cent) at 1,504. The rise in these stocks was attributed to the removal of 10 per cent tax on export earning and no additional tax. The ICICIdirect.com Chief Operating Officer, Mr Anup Bagchi, said "the Union Budget has been favourable from the capital market point of view. The market has been anticipating abolition in the dividend and long term capital gains tax which has gone through".

Mr Sunil Shah, Managing Director, HDFC Securities, said the Budget is capital market friendly and the combination of low interest rates and an attractive tax regime for capital market will help the market attract investment.

Mr Bagchi said the Budget has left the Section 10A/10B limit untouched, which is positive for technology stocks. Almost of the technology stock closed sharply higher from their previous close.

Mr Raamdeo Agarwal, Joint Managing Director, Motilal Oswal Securities, said the Budget is good as there are no negative proposals for the stock market. He said the cut in repo rates by 50 basis points (after the close of market) is also good for the stock market.

Despite favourable announcement, the biggest disappointment was the absence of hike in the foreign investment limit for public sector banks while the stockbrokers were surprised over the increase in the FDI limit and freeing the voting rights for private sector banks. As a result, the SBI stock fell over 5.66 per cent while ING Vysya jumped 10.6 per cent.

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