Sensex dips 210 pts on higher tax proposals in Budget 2012

Stock markets fell as investors found the Union Budget proposals Friday as tax mopping and inflationary, with the BSE benchmark Sensex falling 210 points to 17,466.20, despite firmness in global equities.

Refinery, power, capital goods, banking, PSUs and metals stock faced intense selling pressure.

Finance Minister Pranab Mukherjee in the Budget 2012-13 increased service tax and excise duty to 12 percent from 10 percent, which will make cars, fridges, 2-wheelers, ACs and washing machines costly.

Besides, a higher fiscal deficit of 5.9 percent for the current fiscal overshadowed several positives, including lower income tax and strong indications of more economic reforms.

The Bombay Stock Exchange 30-scrip Sensex was highly volatile and moved between 17,871.00 and 17,426.58. It closed 209.65 points or 1.19 percent down at 17,466.20.

The 50-scrip NSE index Nifty plunged 62.60 points or 1.16 percent to 5,317.90.

The hike in the cess created a negative impact on the oil explorers with ONGC, Cairn and RIL falling in the range of 3-6 percent, he said.

Akshay Gupta, MD & CEO of Peerless Mutual Fund said: "The budget trajectory is headed in the right direction. Despite baby steps, the fiscal consolidation exercise is positive for country's finances."

Investors also remained unimpressed with the proposal to reduce the Securities Transaction Tax (STT), as they were expecting it to be removed totally.

Expressing concerns on macro-economic indicators, he said, there is clear cut impression of weak Govt finances, which could see flight of capital to overseas markets like the US, which are doing extremely well.

Broking firm Nirmal Bang's director Kishore Bang said the volatility in the market may come down in the coming days on the back of increased investor participation.

Besides, analysts said steps such as income tax deduction of 50 percent to retail investors who invest up to Rs 50,000 directly in equities will help the market.

Since the upper limit of annual income is less than Rs 10 lakh to claim this benefit, it covers a significant portion of the tax-paying population. This should provide significant impetus for an individual who is not in the markets, as of now, to enter the capital markets, Bang said.

Globally, while Asian markets were mixed, European equities were trading up in the afternoon deals.

Overall, 21 of the 30 Sensex scrips closed with losses.

Sun Pharma was the top loser, down 7.09 percent, followed by ONGC (4.66 percent), Jindal (4.23 percent), NTPERCENT (3.82 percent), Tata Power (3.65 percent), BHEL (3.54 percent), RIL (3.27 percent), Sterlite (3.22 percent), L&T (3.17 percent), SBI (3.11 percent), GAIL India (1.96 percent), Cipla (1.75 percent), Tata Steel (1.72 percent), Bharti Airtel (1.46 percent) and ICICI Bank (1.42 percent).

Eleven of the 13 sectoral indices closed with losses. BSE-FMCG and Auto rose 1.91 percent and 0.22 percent. Oil&Gas dipped by 3.32 percent; Power - 2.98 percent; Capital Goods - 2.94 percent; PSU - 2.63 percent; Metal - 2.22 percent; Healthcare - 2.02 percent; Bankex - 1.92 percent and Realty - 1.26 percent.

The total market breadth was negative as 1,804 stocks closed in the red, while 1,044 made gains. The total turnover was higher at Rs 3,581.35 crore, from Rs 2,767.92 crore yesterday.

Sensex logs 7th consecutive weekly rise

The BSE benchmark Sensex rose 0.8 percent on Friday to record their seventh straight weekly rise, their best run in nearly two years, bolstered by strong foreign fund inflows amid growing concerns the market has run up too fast in a short span of time.

The benchmark BSE index is up 18 percent this year, mainly on buying by overseas portfolio investors who have pumped in USD 4.4 billion so far this year, after pulling out more than USD 500 million in 2011.

Top lenders such as State Bank of India and ICICI Bank were among the top gainers in the day's trading, fuelled by an improved credit demand outlook amid expectations of interest rate cuts by the central bank.

Power equipment maker Bharat Heavy Electricals Ltd closed 6.7 percent higher at Rs 303.55, after rising as much as 14.3 percent to its highest level in three months, as investors bet on a rise in orders this year.

State-run NTPC Ltd plans to award USD 3.25 billion of equipment orders by March-end after a ruling by India's top court settled a case with a bidder in favour of the country's top power producer, its chairman said on Thursday.

The 30-share BSE index closed up 0.75 percent, or 135.36 points, at 18,289.35, its best close in more than six months. Nineteen of its components ended in the positive territory.

"The global liquidity conditions have improved in the last couple of months and India is benefitting from fewer investment opportunities in the developed markets," said Claugio Bernasconi, a Switzerland-based fund manager for AMC Expert India Fund.

"Although a bounceback was expected after the Indian markets became the worst performer last year, I am turning cautious now because this sudden and strong rally is not supported by any improvement in the fundamentals of the country."

Technical indicators show the benchmark index could be ripe for a correction as it is deep in "overbought" territory, with its 14-day relative strength index at 77 on Friday. A score of 70 and above is considered overbought.

Citigroup said in a research report the Indian market rally was mainly driven by overseas inflows with "relatively little evidence" of retail participation, though the domestic economy or the corporate sector outlook have not changed much.

Indian economic growth has lost momentum as lingering eurozone debt woes, coupled with high domestic interest rates and a policy paralysis at home have hit capital investments by companies.

BSE Sensex regains 18K level, rising 209 points in early trade

The BSE benchmark index Sensex, today regained 18,000 points level by rising nearly 209 points in early trade on sustained buying by funds and retailers on better-than-expected quarterly earnings by corporates.

The 30-share index, which had gained almost 100 points in last two trading sessions, shot up by 208.76 points, or 1.17 percent, to trade at 18,057.33 with all sectoral indices, led by auto and realty, gaining up to 2.63 percent.

The wide-based Nifty of the National Stock Exchange moved up by 60.25 points, or 1.11 percent, to 5,476.30.

Brokers said besides encouraging quarterly corporate earnings, firming trend on other Asian bourses on expectations of a solution to Greece's debt worries boosted the trading sentiment.

Better-than-exepcted quarterly earnings by Tata Motors and other blue-chip companies and easing inflation were other positive factors, they said.

Tata Motors shot up by 6.68 percent to Rs 285.80.

In Asia, Hong Kong's Hang Seng Index rose by 0.09 percent and Japan's Nikkei Index by 1 percent in early trade.

The Dow Jones Industrial Average ended higher by 0.03 percent yesterday.

Sensex cautious ahead of US jobs data

The BSE Sensex eased early on today as investors took profits after a more than 3 percent rally over the past three days and weighed by caution in Asian markets ahead of the key US jobs data.

At early trade, the main 30-share BSE index was down 0.07 percent at 17,419.11, with 13 of its components in the negative territory.

The 50-share NSE index was down 0.19 percent at 5,260.05.

Brokers said continued buying by FIIs on the Indian bourses and encouraging quarterly earnings by some corporates mainly buoyed the trading sentiment but a weak trend on other Asian bourses, capped the gains here.

In Asia, Hong Kong's Hang Seng Index shed 0.19 percent and Japan's Nikkei Index by 0.10 percent in early trade today.

Sensex gains over 176 points in early trade

The BSE benchmark Sensex on Friday shot up by another 176 points in early trade, extending gains for the fourth straight session on continued buying by funds and retailers amid a firming trend in Asian markets.

The 30-share index rose further by 176.39 points, or 1.03 percent, to 17,253.57. It had gained over 338 points in the past three sessions.

In a similar fashion, the wide-based National Stock Exchange Nifty index regained 5,200 points level to trade 49.75 points, or 0.96 percent, higher at 5,208.05 points.

Brokers said apart from a firming trend on other Asian bourses, hopes of easing liquidity in the market after the RBI cut cash reserve ratio by 0.50 percentage point in its policy review on Tuesday, buoyed the trading sentiment.

In Asia, Hong Kong's Hang Seng Index rose by 0.13 percent and Japan's Nikkei Index by 0.40 percent in early trade, Friday.

RBI helps Dalal Street to retain trillion-dollar tag

Reserve Bank's policy action may have failed in containing the Sensex slide to a two-year low, but its intervention in rupee movement has helped Indian stock market retain its trillion-dollar tag, at least for now.

The market went into a tailspin on Friday, as the central bank's decision to keep the interest rates unchanged did not help the sagging investor sentiments, and the barometer Sensex declined to its lowest level since November 3, 2009.

In the process, the value of Indian stock market, measured in terms of the collective value of all listed shares, fell to Rs 54,11,301.50 crore -- which is just over USD one-trillion dollar level at current currency rates.

In the US dollar terms, the Indian market would have lost its trillion-dollar valuation tag, if the rupee had managed to at least hold onto the record sub-54 level, it hit yesterday.

Rupee plunged to a record low of Rs 54.30 against the US dollar yesterday, but an RBI intervention reversed the fall and the Indian currency came back to near Rs 52-level.

At the rupee's record low level, Indian stock market's size would have been as low as USD 996.5 billion at the end of today's trade.

However, as the rupee has returned to near 52-level and closed at Rs 52.70 against the US dollar today, the market valuation managed to hold onto the USD one trillion mark -- although with a very thin margin at USD 1.026 trillion.

But, this position could be lost anytime, if there is any further fall in rupee valuation, or the stock market continues its losing streak.

There were no high expectations for any rate cut decision from the RBI's policy meeting today, but the prevailing high-rate regime has significantly hurt the corporate sentiments due to high borrowing costs.

The Indian market had first achieved a trillion-dollar size about four and half years ago on May 28, 2007, but moved out of this coveted league about a year later on July 1, 2008.

India again joined this elite club of markets with trillion-dollar valuation about a year later on June 3, 2009.

The Indian market was, in fact, seen inching towards the two-trillion dollar mark at least twice in the past -- first in early 2008 and then at the beginning of 2011 with a size as high as USD 1.9 trillion.

However, a sharp plunge in the market this year has led to its valuation falling by close to Rs 20 lakh crore (over USD 500 billion) and currently faces a high risk of losing its trillion-dollar tag.

Rupee hits record low past 54/dollar

The rupee dropped to another record low of 54.30 against the dollar on Thursday as concerns heightened slowing domestic growth will spur further capital outflows.

The partially convertible rupee hit an all-time low of 54.30 per dollar in early trading, taking losses to about 4 percent this week.

The domestic currency had tumbled by 48 paise to close at a record low of Rs 53.71/72 per dollar in the previous session on strong demand for the American currency and strengthening of the dollar against its rivals overseas.

Forex dealers said in addition to continued demand for the American currency from importers and some banks, dollar gains against the euro and other currencies amid concerns over the eurozone debt crisis put pressure on the Indian rupee.

Any major intervention by the central bank is unlikely given India's relatively limited foreign exchange reserves.

India's wholesale prices rose 9.11 percent in November, leaving inflation stubbornly high and suggesting the central bank would hold rates steady at its review on Friday even as worries grow over the health of the economy. 
   
Economists expect the central bank to accelerate monetary easing in 2012 as economic conditions worsen. 
   
The euro nursed heavy losses in Asia on Thursday, having plumbed its lowest level in 11 months, as signs the European debt crisis could run sent investors fleeing risk assets for US Treasuries.  

Rupee drops to historic low at 53.40 against US dollar

The Indian rupee tanked by 56 paise to a historic low of Rs 53.40 per US dollar in early trade Tuesday due to persistent demand for the American currency from banks and importers on the back of a higher dollar in overseas markets and weak domestic equity markets.

The rupee resumed lower at Rs 53.10/11 per dollar on the Interbank Foreign Exchange, as against its previous close of Rs 52.84/85 per dollar, and dropped further to an all-time low of Rs 53.40 per dollar before quoting at Rs 53.27/28 per dollar at earlier trade.

Sustained dollar demand from banks and importers in view of a stronger dollar in overseas markets and foreign capital outflows affected the rupee value against the dollar.

The US dollar gained against major currency rivals in the New York market yesterday, while the euro fell to its lowest level in two weeks amid renewed concerns that European leaders aren't doing enough to contain the region's sovereign debt crisis.

Meanwhile, the BSE benchmark Sensex was down by 12 points, or 0.07 percent, in early trade.