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UNION BUDGET 2010   IMPLICATIONS  FOR THE MARKET --IMPACT  ON  SENSEX  &  NIFTY
SENSEX <ul><li>Sensex is an index, an index is basically an indicator. </li></ul><ul><li>It gives you a general idea about...
NIFTY <ul><li>Nifty is an indicator of all the major companies of NSE. </li></ul><ul><li>The Nifty index is a composite of...
Pre-Budget Jitters <ul><li>Sensex ended flat at 16,254 while Nifty ended flat at 4,859. </li></ul><ul><li>Thursday,25 th  ...
Budget Day <ul><li>At 9:02 hours IST, the  Sensex  was trading at 16291, up 36 points and the  Nifty  was at 4871, up 11 p...
Market Reaction  <ul><li>Market players largely welcomed the Union Budget 2010-11 which proposed market friendly measures ...
Economy Looks Good Indeed! <ul><li>Finance Minister, Pranab Mukherjee, has pegged the fiscal deficit for the year ended Ma...
A Shift Towards A Better System  <ul><li>On disinvestment front, the government has estimated to raise Rs 40000 crore from...
Effect on Different Sectors <ul><li>Customs on crude restored and CET for refined product also hiked. This is negative for...
Effect on Different Sectors <ul><li>Defence allocation increased to Rs 1.4 lakh crore. Positive for defense sector compani...
Effect on Different Sectors <ul><li>The Central bank will consider banking licences for NBFCs, which will be positive for ...
Effect on Different Sectors <ul><li>MAT (minimum alternate tax) has been increased to 18% from 15%, which will be negative...
A Few Tips….. <ul><li>In short term you can invest in stocks like Suzlon, IRB, HCC, Gammon, IVRCL, L&T, Punj Lloyd and Nag...
The Boom Continues…… <ul><li>5 th  March 2010 : Sensex closes at 16,994.49 </li></ul><ul><li>Nifty closes at 5,088.70 </li...
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Budget 2010 implications for the market - ananya

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Budget 2010 implications for the market - ananya

  1. 1. UNION BUDGET 2010 IMPLICATIONS FOR THE MARKET --IMPACT ON SENSEX & NIFTY
  2. 2. SENSEX <ul><li>Sensex is an index, an index is basically an indicator. </li></ul><ul><li>It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down. The sensex is an indicator of all the prices of the major companies of the BSE (Bombay Stock Exchange) </li></ul>
  3. 3. NIFTY <ul><li>Nifty is an indicator of all the major companies of NSE. </li></ul><ul><li>The Nifty index is a composite of the top 50stocks listed on the National Stock Exchange. It is a simplified tool which helps investors & ordinary people alike, understand what happens in the stock market & by extension, the economy. </li></ul>
  4. 4. Pre-Budget Jitters <ul><li>Sensex ended flat at 16,254 while Nifty ended flat at 4,859. </li></ul><ul><li>Thursday,25 th February turned out to be another session of consolidation where the benchmark indices traded in a narrow range throughout the day. BSE Sensex was unable to bounce back despite an upbeat Economic Survey. Even a sharp rise in India’s core sector growth was unable to cheer sentiment on Dalal-Street. </li></ul>
  5. 5. Budget Day <ul><li>At 9:02 hours IST, the Sensex was trading at 16291, up 36 points and the Nifty was at 4871, up 11 points. </li></ul><ul><li>At 10:11 hours IST, the Sensex was trading marginally higher on the back of buying interest in infrastructure, oil & gas, metal, telecom, realty, FMCG and select banking stocks. </li></ul><ul><li>At 11:40 hours IST, the Sensex was trading at 16354, up 100 points and the Nifty was at 4894, up 34.75 points. </li></ul><ul><li>At 12:41 hours IST, the Sensex was trading at 16563, up 306 points and the Nifty was at 4654, up 95 points. </li></ul><ul><li>The Sensex closed, up 1.08 percent, or 175.35 points, at 16,429.55. The Nifty closed at 4,922.30. </li></ul>
  6. 6. Market Reaction <ul><li>Market players largely welcomed the Union Budget 2010-11 which proposed market friendly measures including reduction in surcharge on corporate tax, lower fiscal deficit projection, roadmap for rollout of goods & service tax (GST) and direct tax code (DTC), among others. </li></ul>
  7. 7. Economy Looks Good Indeed! <ul><li>Finance Minister, Pranab Mukherjee, has pegged the fiscal deficit for the year ended March 2011 (FY11) at 5.5% of the gross domestic product (GDP). This is lower than the fiscal deficit as percentage of GDP of 6.9% in the revised estimates for the current fiscal. The finance minister said the government also aims to reduce the deficit further to 4.8% of GDP in the year starting 1 April 2011, and to 4.2% in the year from 1 April 2012. </li></ul>
  8. 8. A Shift Towards A Better System <ul><li>On disinvestment front, the government has estimated to raise Rs 40000 crore from disinvestment in the year ended March 2011. It has also estimated Rs 35000 crore from sale of third generation telecom auctions. </li></ul><ul><li>The Finance Minister in his budget speech also unveiled a roadmap for implementation of goods and service tax (GST) and direct tax code (DTC). He said that the government is confident of rollout of GST and DTC by 1 April 2011. The deadline for the GST introduction was earlier pegged at 1 April 2010. </li></ul><ul><li>DTC will replace the Income Tax Act whereas the GST will replace most indirect taxes at central and states levels like service tax, excise duty, VAT, cesses, surcharges and local levies. </li></ul><ul><li>The Finance Minister also proposed a reduction in surcharge on corporate tax for domestic companies to 7.5% from the present 10%. </li></ul>
  9. 9. Effect on Different Sectors <ul><li>Customs on crude restored and CET for refined product also hiked. This is negative for oil marketing companies. </li></ul><ul><li>Excise duty hiked to 10% from 8% and there will be partial rollback of excise duty relief on large cars, cement and cement products. This will be negative for auto, steel and cement companies. </li></ul><ul><li>Interest subvention of 1% on low cost housing will spur demand and subvention will be applicable for loans upto Rs 20 lakh. It is positive news for reality companies like HDIL. </li></ul><ul><li>FM increased excise duty on cigarettes and all other non-smoking tobacco. Negative for companies like ITC and Godfrey Phillips. </li></ul>
  10. 10. Effect on Different Sectors <ul><li>Defence allocation increased to Rs 1.4 lakh crore. Positive for defense sector companies like L&T, BEL, etc </li></ul><ul><li>FM increased weighted deduction from 150% to 200% for in house R&D. This will be a positive for auto and pharma companies. </li></ul><ul><li>Finance Minister also declared Rs 1.73 lakh crore for infrastructure development. Road development allocation hiked to Rs 19,894 crore, which will be positive for IRB, HCC, Gammon, IVRCL, L&T, Punj Lloyd and Nagarjuna Construction. </li></ul>
  11. 11. Effect on Different Sectors <ul><li>The Central bank will consider banking licences for NBFCs, which will be positive for IFCI and Reliance Capital. </li></ul><ul><li>For the power sector, government doubled allocation for power sector to Rs 5,130 crore, which will be positive for NTPC, Reliance Power and Adani Power. </li></ul><ul><li>For agriculture, interest rate subvention for farm loans hiked to 2% and FM says, govt will extend farm loan payment by 6 months. FY11 bank farm loan target raised to Rs 3.75 lakh crore. </li></ul><ul><li>For the banking sector, FM says, the government will focus on recapitalization of banks, which will be positive for Syndicate Bank & Dena Bank and Uco Bank & Central Bank of India. </li></ul>
  12. 12. Effect on Different Sectors <ul><li>MAT (minimum alternate tax) has been increased to 18% from 15%, which will be negative for companies like RIL, HUL, Bharti and Reliance Comm. </li></ul><ul><li>The government put clean energy cess on imported, domestic coal, which will be negative for Tata Power. </li></ul><ul><li>The government exempted agriculture seeds from service tax; positive for Advanta India. </li></ul><ul><li>Cut in excise duty for wind farm unit and inputs for making rotor blades for wind turbines and wind mills exempt from excise. Good News for wind energy related companies like Suzlon. </li></ul>
  13. 13. A Few Tips….. <ul><li>In short term you can invest in stocks like Suzlon, IRB, HCC, Gammon, IVRCL, L&T, Punj Lloyd and Nagarjuna Construction, IFCI and Reliance Capital which are somewhere linked positively to the announcements made in budget. </li></ul><ul><li>On other hand, one can stay away from auto, cement and oil marketing companies. </li></ul>
  14. 14. The Boom Continues…… <ul><li>5 th March 2010 : Sensex closes at 16,994.49 </li></ul><ul><li>Nifty closes at 5,088.70 </li></ul><ul><li>Foreign Funds has bought $791 million of Indian equity in the last 3 sessions which is a sign of renewed interest in the Indian economy. </li></ul>
  15. 15. Thank You

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