Apart from this, the market liked the fact that Mr Mukherjee “did not play spoilsport”, said Mr Jagannadham Thunuguntla Equity of SMC Capital. The budget did not add to the nervousness of the market. Market men, in fact, took utmost advantage of the rally and booked profits at the peak of 332 points ahead of the long weekend with Monday being a holiday for Holi.

1. Street Smart
SATURDAY, 27 FEBRUARY 2010 02:31
Mumbai, Feb. 26: The stock market gave finance minister Pranab Mukherjee’s 2010-11 Budget an 335-point intra-day salute as the
rollback of some tax concessions was mild and there were no nasty surprises but pleasant ones like the hike in the tax exemption
limit which puts Rs 50,000 in the hands of the consumer.
Service tax was left untouched and MAT was the only really negative factor in the Budget for the corporates followed by the central
excise and customs duty on crude. The budget is positive for the automobile and real estate segments because it puts more money
in the hands of consumers.
The minimum alternate tax will affect most of the Nifty 50 companies like RIL, telecom companies Bharti, Rcom etc., said Mr Amar
Ambani of Infoline.
Mr Ketan Dalal of PriceWaterhouseCoopers was of the view that the FM could have been clearer on whether MAT would be
calculated on assets as the Direct Tax Code envisages or on book profits. There has been huge resistance from companies to the
calculation on the basis of assets.
The market loved several factors in the budget, like for the first time a finance minister has laid a roadmap for bringing down fiscal
deficit to 4.1 per cent in three years which is very encouraging considering that in developed countries it is 11-12 per cent. In India
the government debt is 62 per cent of GDP compared to 64 per cent in the US, 125 per cent in Greece and 230 per cent in Japan,
points out Mr Alex Mathew of Geojit BNP Paribas Financial Service.
Apart from this, the market liked the fact that Mr Mukherjee “did not play spoilsport”, said Mr Jagannadham Thunuguntla Equity of
SMC Capital. The budget did not add to the nervousness of the market. Market men, in fact, took utmost advantage of the rally and
booked profits at the peak of 332 points ahead of the long weekend with Monday being a holiday for Holi.
However, the Sensex is not expected to keep up these gains as the nervousness still remains predicated on the global financial
crisis, and unwinding concerns, Mr Thunuguntla said.
Mr Mathew agrees and said that the the momentum after Friday’s breakout will depend on quarterly numbers and several other
factors.
The Sensex closed up 175.35 points at 16,429.55 while the Nifty was up 62.55 points 4,922.30.
In fact, it was like a jugal-bandi between the finance minister and the markets. When he started his speech at 11 am the Sensex
was up 64 points and by the time he came to the stimulus and disinvestment programmes for agriculture the Sensex touched 77
points and jumped to 93 when he talked about the funds for upgradation of infrastructure to Rs 17,355 crores and then there was no
looking back.
The announcement of additional funds for the power and coal sectors saw the Sensex touch 107 points, and then as he began to
talk about his tax proposals the Sensex soared from 169 points to 248. Strangely when he came to the part of imposing excise on
cigarettes and all tobacco-related industries, the Sensex sprinted to 359 points, happy that all the other industries went scotfree. The
Opposition parties walked out of Parliament at this point in protest at chewing tobacco being taxed.
There has never been such a good budget in many years. The 2009 budget saw the Sensex tank 800 points. This time the market
was fearing an increase in excise and service tax, but it did not happen.
On the contrary, the budget focused on growth and did not cut social expenditure and this is a positive sign for public sector banks
which will get more funds, infrastructure, auto, banking and finance, said Mr S.P. Tulsiyan, a stock market adviser. This should
attract foreign direct investment. Another factor that will attract foreign investment is that the FM has made FDI simpler sending a
signal that investment is welcome