Union Budget Highlights - 2008.

<DIV><FONT face=Arial size=2> <OL> <LI> <DIV align=justify><STRONG>Dividend Distribution Tax unchanged at 15%.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Central Sales Tax cut to 2% from 3% - Positive for Food Processing companies.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to start GST from April 1, 2010.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>No Change in STT Rates.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To withdraw banking cash transaction tax from April 1, 2009.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To give 5 Year Tax Holiday for Hotels in some areas.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Increase in short term capital gain tax from 10% to 15%.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>On an income of Rs5 lakhs - savings amount to Rs45,000.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To grant 5 year tax holiday for new hospitals to be setup in specified areas - +ve for Apollo Hospital, Fortis etc. </STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Weighted deduction of 125% for R&D – Buy on Ranbaxy Labs and Dr Reddy Labs.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Major Income tax Changes - to boost consumer spending Buy Marico and GSK Consumer.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>No change in corporate tax rate and no change even in surcharge.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>In case of Women, Exemption limit increased to Rs1,80,000.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Senior citizen exemption raised from 1,95,000 to 2,25,000.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Proposes to increase personal income tax exemption limit to Rs1,50,000.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Minimum relief Rs4000 for every assesse.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Excise duty on bulk cement imposed at Rs400/tonne or 14% Ad valorem whichever is higher - Neutral for Cement companies .</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Customised software under service tax net.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Higher excise on packaged software (8% to 12%) - Negative for Software sector.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To tax Filter and Non Filter Cigarettes on Par - Marginally negative for ITC.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Fall in duty on wireless data cords from 16% to Nil - Positive for Telecom Sector.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>No change in excise duty structure on Retail Cement.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To cut excise duty on all goods in Pharma from 16% to 8% - Positive for Pharma Sector.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To cut excise on some papers, paper products.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To reduce excise duty on two wheelers from 16% to 12% Buy Bajaj Auto.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To reduce excise duty on small cars from 16% to 12% Buy Maruti and Tata Motors.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To reduce General CENVAT rate from 16% to 14%.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To cut customs duty on crude, unrefined sulphur.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To cut project import duty to 5% from 7.5%.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Custom Duty reduced to Nil on Steel melting scrap from 5% - Positive for Non Integrated Steel Players .</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to cut duty on certan bulk drugs to 5% - Positive for Pharma Sector.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Proposes No Change in Peak Customs Duty.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Current Tax-GDP ratio at 12.5.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Fiscal Deficit to be 2.5% by FY09 - Need only 1 year to eliminate Revenue Deficit.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Revenue Deficit to be 1.4% and Fiscal Deficit to be 3.1% of GDP.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Planned Expenditure about 34.2% of total expenditure.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to spend Rs 1.05Trn on Defense sector, up 10% - Positive for Defense Companies.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Allocation for TUF loan hiked about 20% - +ve for Textile Sector.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Thrust on Smart Cards Buy on Bartronics India.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Accelerating bidding process for 5 UMPPs - +ve for PFC.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Likelky Subvention of agri loans waivers to neutralise impact on banks.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Government allocates RS16.8bn for IT Sector Buy on 3i Infotech and TCS.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to spend more on Textile Sector - Buy on Bombay Dyeing and Alok Ind.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to get as much as $8bn from latest Gas, Oil.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to allocate Rs129 bn for highways Buy on HCC,IVRCL.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>National Fund for Power Transmission and Distribution.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>To award 4th UMPP shortly - +ve for Power.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to achive power expansion target in 11th plan - +ve for Companies like BHEL.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Waiver of previous loans and fresh loans - Positive for Agriculture/ Fertiliser companies .</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to spend more on Rural Development and Roads - Positive for Infrastructure sector.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Manufacturing slowdown due to rising rates and rupee.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Growth in capital goods still high at 20.2%.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Savings Rate at 35.6% and Investment Rate at 36.3% by end of 2008.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Total value of overdue loans including OTS at Rs60,000cr.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Debt Waiver to be completed by June 30 2008 - Farmers to be eligible for fresh loans post waiver.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Clarity awaited on details of scheme regarding reimbursement to banks of waiver amounts<BR>Waiver Amounts to 4% of Total Bank.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Scheme of debt waiver of all agri loans upto March 2007 - Negative for Banking Sector.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>FM eyeing Elections - Slew of populist measures announced.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Complete waiver of loans for marginal and small farmers.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Government introduces scheme for debt waivers for.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>FM says fertiliser subsidy to continue.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>5 lac hectare increased irrigation potential.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to spend Rs200bn on irrigation-Positive for Finolex Ind and Jain Irrigation.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Government to spend additional Rs120bn on 5-Yr plan programs.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Government increases thrust on santitation - s Buy Electrosteel Castings.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Increase in sanitation allocation positive for DI pipe makers such as Electrosteel castings.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Increased allocation to Rajiv Gandhi Drinking water scheme to Rs7300cr from Rs6500cr, beneficial to companies like IVRCL.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Increased spending on polio to benefit Panacea Biotech.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to spend Rs120bn on National Rural Health Plan.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Education and Health Sector to be twin pillars of growth.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>16,534cr allocated for Health Sector an increase of about 15%.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Additional allocation for education beneficial for Everonn, Educomp, Core Projects, NIIT etc.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to increase spending on Bharat Nirman plan.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Allocation for education to be raised to Rs34,400cr from Rs28,674cr.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Allocation for education to be increased by 20%.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>India to increase Gross Budgetary support in FY09.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>Agriculture estimates to grow at 2.6% for FY08.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>FM confident of maintaining 8.8% GDP growth average.</STRONG></DIV></LI> <LI> <DIV align=justify><STRONG>FM says agri growth disappointing.</STRONG></DIV></LI></OL></FONT></DIV>

Union Budget Highlights - 2008.

Dividend Distribution Tax unchanged at 15%. Central Sales Tax cut to 2% from 3% - Positive for Food Processing companies....

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Income Tax payers get more exemptions

<DIV>Income tax payers will feel happier after this Budget. Presenting the Union Budget for 2008-09 in the Lok Sabha, Finance Minister P Chidambaram today raised the basic exemption limit from Rs 1.1 lakh to 1.5 lakh for all male assesses. Also, the limit for women assessees has been hiked from Rs 1.45 lakh to 1.80 lakh and for senior citizens from 1.95 lakh to 2.25 lakh.<BR><BR>The reason: tax collections have been going up in the last few years. And the numbers speak for themselves. The tax to gross domestic product (GDP) has risen from 9.2% in 2003-04 to 12.5% in 2007-08.<BR><BR>The rise in the exemption limit basically implies that a person who was paying a tax of Rs 4,120 annually on his income of Rs 1.5 lakh will not be paying anything at all. Similarly, women assessees would save Rs 6,695 and senior citizens would save Rs 6,180 on income of Rs 1.8 lakh and 2.25 lakh, respectively.<BR><BR>Though this may sound like a small relief, when one goes through the numbers, income earners up to Rs 5 lakh are likely to save between Rs 40,000-45,000. However, the incremental saving over Rs 5 lakh income is just another Rs 5,000. For instance, an individual earning Rs 25 lakh, the savings is Rs 49, 852, Rs 49, 286 and Rs 43,621 for male, female and senior citizen, respectively.<BR><BR>Interestingly, Indian taxpayers will now be better off than those in the US. Says Kaushik Mukerjee, executive director, PricewaterhouseCoopers, "The finance minister has increased the threshold for personal tax exemption by about 35%, which is about $4,000. This is more than the basic threshold in the US where the ceiling is $3,400. However, we are yet to reach the levels of Australia ($5,500), UK ($11,000) or Singapore ($15,000). We were ahead of China already where the annual threshold in China is about $ 1400." Though this hike is substantial in relative terms, Mukherjee feels that it may take some time to catch up with countries like Australia, UK and Singapore.<BR><BR>Many also expected that the education cess of 3% should have also gone, but the FM did not announce any such moves. Also, the surcharge of 10% on the individual income of over Rs 10 lakh stays.<BR><BR>Also, the much-awaited relief on banking transaction tax will now be removed from April, 2009. This tax, 0.1% on transactions of Rs 25,000 on a single day, was introduced in the 2005-06 Budget. This created quite a stir among the consumers who felt that they were being tax again on the same income.<BR><BR>On the whole, the idea of FM seems to be to put more money in the hands of the consumer, which would give them more spending power. Given that there are worries of a slowdown in the two-wheelers and car segment, a little more cash at hand would definitely help consumers.<BR><BR>The new IT slabs, effective from the next fiscal year, would be as follows:<BR><BR>10% on income of Rs. 1.50 lakh to Rs 3 lakh;<BR><BR>20% on income of Rs 3 to Rs 5 lakh; and<BR><BR>30% on income of Rs 5 lakh onwards.</DIV>

Income Tax payers get more exemptions

Income tax payers will feel happier after this Budget. Presenting the Union Budget for 2008-09 in the Lok Sabha, Finance Minister P Chidamb...

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Weekly Close : Good budget?but unhappy traders

<DIV>All eyes were on budget for the week. Everyone had some expectation with budget and hopes that FM will fulfil their wish. Stock specific action was seen ahead of the years most important event. Markets were choppy and volatile for the whole week..which were also backed by F&O settlement week. Overall volumes were lower as investor remained cautious.<BR><BR>Sensex gained 1.3% for the week. Gains were registered by Bhel +10.26%, Cipla +3.60%, HDFC +9.16%, Hind Liver +5.45%, Hindalco +5.73%, Mah & Mah +10.53%, Ranbaxy +7.79%, Maruti +13.62%. Losses were led by DLC -5.91%, Infosys +3.04%, ICICI Bank +2.12%, TCS +3.39%.<BR><BR>People who expected much more from the budget were dissatisfied by it but overall it was a good budget. Mr. Chidambaram delivered some good aspect as well as some negative aspect from its last Budget in his small stint as an FM. Everybody expected a popular budget as the FM could gain some confidence as the Election nears.<BR><BR>The FM took a big step towards populism as he announced the waiver off farm loans worth Rs. 60000 cr for the small and medium farmers while it also announced 25% rebate through one time settlement scheme for other farmers. Its good news for the farmers specially those who are suffereing. However the ones who have been repaying the loans will feel the pinch and this will set a wrong precedence and bring in indiscipline.<BR><BR>Government estimates that about three crore small and marginal farmers and about one crore other farmers will benefit from the scheme. The total value of overdue loans being waived is estimated at Rs.50,000 crore and the OTS relief on the overdue loans is estimated at Rs.10,000 crore.<BR><BR>The waiver off such large amounts would hit the commercial banks. Quite a bit of this has been written off and may not impact much. Also its not clear on who will take the hit yet. Will the Government pay for this is not clear Largely given that its the Governments plan then they should. What probably would happen is that the Government may compensate them to the extent which has not been written off yet.<BR><BR>On the excise side, the general Central Value Added Tax (Cenvat) rate on all goods has been reduced from 16% to 14% and thats a poitive in terms of lower prices for the economy. Sports goods , exports of gems and jewellery, helicopter simulators, domestic fertiliser production will get customs duty sops so that is positive.<BR><BR>Cut in Excise Duty of Buses & Chassis, Small cars, Two-wheelers and the Three-wheelers from 16% to 12% is a big benefit. Thats a big relief against the high input costs. This is positive for Maruti, Hero Honda, Bajaj Auto and somewhat for Ashok Leyland and Tata Motors. The problem remains for the two wheeler industry is the demand and credit availability. The impetus in the form of lower income tax, higher disposable income could stimulate demand. .<BR><BR>The government will invest around 3300 cr over a period of 3 years to connect rural areas. Positive for Tulip IT, BSNL, Net4India, HCL connect, etc.<BR><BR>Textile companies will see the benefits continuing for TUFs<BR><BR>Cement companies had some negatives in store with higher excise duties. Also they have to face the pressure of new capacities which are expected to come on later this year.<BR><BR>The focus on creating a debt market tradable we believe is a significant step and that will set the ball rolling for lower interest rates.<BR><BR>The big gift awaited tax payers and that was a big cut in income tax rates. Surely we believe that we have not seen the small print yet but certainly it adds significant positives into the hands of investors.<BR><BR>There were a couple of disappointments.<BR><BR>No changes have been made in the corporate income tax rates and also the surcharge and that was a disappointment as everyone was hoping that with collections what they are the Government could have been a bit generous here..<BR><BR>Short-term capital gains tax has been increased from 10% to 15%. Some negative for the capital markets as and also the security Transaction Tax offet for Busines income is disallowed.<BR><BR>The deficits seem quite under control but the 6th pay commission recommendations are not included and nor the 60000 cr bonanza write off for the banks.<BR><BR>All in all a decent budget which cant be called a non event. The FM has "Gambled" that growth will get a kicker with higher disposable income with tax payers and also the Farmers. Its also brownie points ahead of the elections. Does that mean that we can have elections soon. .. ! Well thats something to ponder over the week end !<BR><BR>Markets reacted negatively but the fine print will be known over the weekend. We believe that the budget has delivered more against the expectations which were almost none. There were implict hopes and that was what the markets reacted to as that was not met. Technically: Sensex have turned into a very narrow range for sometime now. 18300 is the major resistance on the upside and 17200 is the major support on the downside.<BR><BR>The global factors will continue to dominate but this budget we believe is one of stimulation and there is good reason for the markets to react positively on their own. Unless there are some big negatives in the fine print expect a positive market starting next week.</DIV>

Weekly Close : Good budget?but unhappy traders

All eyes were on budget for the week. Everyone had some expectation with budget and hopes that FM will fulfil their wish. Stock specific ac...

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Post Market Commentary - Feb 29 2008

<DIV>The Indian market made a smart recovery towards the final trading hours of the session to pare most of its losses. Tracking the weak global cues, the domestic market opened on a sad note and kept on hovering in the negative territory throughout the trading session. The market tumbled in the mid session as the finance minister announced a hike in short term capital gains tax to 15% from 10% earlier. This led to the negative sentiments in the market. The finance minister kept the corporate tax and the tax on securities transaction tax unchanged. The software stocks fell, as the government did not announce any relief for this sector in terms of export. Auto stocks gained as the government reduced excise duty on small cars to 12% from 16%. Government cut excise duty on hybrid cars to 14%, from 24%. India''s wholesale price index (WPI) rose 4.89 % in the 12 months to 16 February 2008 over the same period last year from the previous week''s rise of 4.35%. From the sectoral front, the metal stocks remained the centre of attraction as most buying was seen from these baskets. The BSE Sensex closed lower by 245.76 at 17,17,578.72 and NSE Nifty fell by 61.6 points to close at 5,223.50. The BSE Mid Cap and Small Cap closed lower by 31.37 points and 40 points at 7,680.39 and 9,628.13 respectively.<BR><BR>The Capital Goods index declined 479.36 points at 16,119.52. Major losers are Suzlon energy (5.67%), Punj Lloyd (4.69%), Crompton Greaves (3.59%), L&T (3.24%) and ABB (2.95%).<BR><BR>The BSE Metal index fell by 232.49 points to close at 16,739.52. Losers are Bhushan Steel (5.45%), Jindal Stainless (3.20%), Tata Steel (2.69%), Nalco (3.04%), Jindal Steel (2.21%).<BR><BR>The BSE Oil & Gas index dropped by 132.71 points at 11,032 as Reliance Inds (3.09%), ONGC (2.58%), BPCL (1.18%), RNRL (0.78%), HPCL (0.70%) and GAIL India (0.67%) closed lower.<BR><BR>The Realty index closed lower by 267.43 points at 9,565.67 as Unitech (4.57%), Akruti City (3.51%), DLF (3.08%), Indbul Real (2.24%), Mahindra Life (1.56%) closed in red.</DIV>

Post Market Commentary - Feb 29 2008

The Indian market made a smart recovery towards the final trading hours of the session to pare most of its losses. Tracking the weak global...

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Sensex sheds 246 points in choppy trade as FM hikes short term capital gains tax

<DIV>Volatility on the stock market is common on the day of presentation of Union Budget. And it was no exception this time. A strong intra-day rebound was witnessed in mid-afternoon trade today after a steep fall in early afternoon trade. However, the recovery proved short lived as the market failed to sustain higher level in late trade. The market ended with modest losses for the day. 21 out of 30 Sensex stocks declined.<BR><BR>Sensex had tumbled more than 500 points in early afternoon trade soon after the finance minster (FM) P Chidambaram announced a hike in short term capital gains tax on sale of shares to 15% from 10%, in Union Budget 2008-09 which he tabled in parliament today.<BR><BR>Just before the announcement of hike in short term capital gains tax by the finance minster, the market had recovered from lower level after an intial fall triggered by announcement of populist measures in the Budget viz. a major debt waiver package to the farmers. The market had opened in the red and remained subdued in early trade before FM's Budget speech, tracking weak global markets.<BR><BR>The 30-share BSE Sensex declined 245.76 points or 1.38% at 17,578.72. Sensex hit a low of 17,258.20 in afternoon trade. At the day's low, Sensex lost 566.28 points. Sensex hit a high of 17,779.54 in early trade. At the day's high, Sensex lost 44.94 points.<BR><BR>S&P CNX Nifty fell 61.6 points or 1.17% to 5,223.50.<BR><BR>Capital goods and IT stocks fell. Auto stocks rose. The market breadth was weak.<BR><BR>There was no change in corporate tax and the rate of Securities Transaction Tax (STT), too, was kept unchanged, in Union Budget 2008-09. The finance minister said STT paid by the taxpayer will be treated like any other deductible expenditure against business income.<BR><BR>The general Centvat on all goods has been reduced to 14% from 16%. The peak customs duty was kept unchanged at 10%.<BR><BR>The Finance Minister (FM) announced changes in personal income tax slabs that will bring down tax liability of individual tax payers substantially. With an eye on parliamentary elections in 2009, FM also announced a package of a massive Rs 60000 crore of waivers of loans of farmers.<BR><BR>Market breadth was weak: on BSE 1,638 stocks declined as compared to 1,070 stocks that advanced. 42 stocks remained unchanged.<BR><BR>BSE clocked a turnover Rs 6700 crore today 29 February 2008 compared to Rs 5,028.03 crore on Thursday 28 February 2008.<BR><BR>Nifty March 2008 futures were at 5140.10, at a huge discount of 83.40 points as compared to spot closing of 5223.50.<BR><BR>The NSE's futures & options (F&O) segment turnover was Rs 49,083.49 crore, which was lower than Rs 61,065.26 crore on Thursday, 28 February 2008.<BR><BR>India's wholesale price index (WPI) rose 4.89 % in the 12 months to 16 February 2008 over the same period last year, higher than the previous week's rise of 4.35 %, government data showed today.<BR><BR>The BSE Mid-Cap index declined 0.41% to 7,680.39 and BSE Small-Cap index fell 0.41% to 9,628.13. Both these indices outperformed Sensex.<BR><BR>BSE Consumer Durables index (down 2% to 4,699.34 BSE IT index (down 2.65% to 3,862.45), BSE PSU index (down 0.18% to 8,484.16) BSE Power index (down 2.06% to 3,670.94), BSE Capital Goods index (down 2.89% to 16,119.52), BSE Realty index (down 2.72% to 9,565.67) underperformed Sensex.<BR><BR>BSE Oil & Gas index (down 1.19% to 11,032.16), BSE Metal index (down 1.37% to 16,739.52), BSE HealthCare index (up 0.08% to 3,928.78), BSE Auto index (up 1.19% to 4,887.17), BSE Bankex (up 0.4% to 10,113.73), and BSE FMCG index (up 0.91% to 2,274.39) outperformed Sensex.<BR><BR>Capital Goods stocks declined. Larsen & Toubro (down 3.24% to Rs 3,523.05), Bharat Heavy Electricals (down 1.79% to Rs 2,282) and Suzlon Energy (down 5.67% to Rs 281.30) edged lower.<BR><BR>Software stocks fell after after the Finance Minister did not announce any relief for the export-driven sector. Infosys (down 3.29% to Rs 1,546.85), Satyam Computer Services (down 2.83% to Rs 434.15), Wipro (down 2.64% to Rs 434.65) and Tata Consultancy Services (down 0.62% to Rs 874.30) edged lower.<BR><BR>Maruti Suzuki rose 3.86% to Rs 867.20 after government reduced excise duty on small cars to 12% from 16%. Government cut excise duty on hybrid cars to 14%, from 24%. Farm equipment maker Mahindra & Mahindra rose 1.86% to Rs 692.80 after the Finance Minister proposed higher farm credit target.<BR><BR>Bajaj Auto rose 2.73% to Rs 2,280.15 after the Government cut excise duty on two-wheelers to 12%, from 16%.<BR><BR>DLF (down 3.08% to Rs 780.55) and Reliance Industries (down 3.09% to Rs 2,458.25) edged lower from the Sensex pack<BR><BR>All major PSU Banks recovered on television reports the Indian government would reimburse the PSU banks for its Rs 60,000 crore loan waiver for farmers over a period of three years. State Bank of India rose 3.43% to Rs 2,109.70 and Punjab National Bank rose 3.48% to Rs 604.15.<BR><BR>Earlier in the morning the Finance Minister's announcement of a complete waiver of loans for small and marginal farmers with agricultural holding of 1-2 hectors of area, had spooked PSU banking shares with exposure to the rural sector. Meanwhile, Finance Minister has withdrawn Banking Cash Transaction Tax (BCTT) effective from 1 April 2009.<BR><BR>Stocks of the paper manufacturing firms were mixed. The Finance Minister proposed a reduction in excise duty on paper products. J K Paper (down 1.25% to Rs 39.90) and Tamil Nadu Newsprint & papers (down 0.33% to Rs 104.65) edged lower. However, Ballarpur Industries was flat at Rs 136.90 and West Coast Paper rose 0.06% to Rs 80.05. Finance Minister proposed that excise duty will be reduced on paper, paper board and articles made therefrom manufactured out of non-conventional raw materials by units not having an attached bamboo/wood pulp making plant from 12% to 8%.<BR><BR>Ashok Leyland moved up 4.17% to Rs 37.45 after the Finance Minister proposed a reduction in excise duty on buses and their chassis to 12% from 16%, in Union Budget 2008-09.<BR><BR>Sesa Goa spurted 6.69% to Rs 3,464.20 after the finance minister in Union Budget 2008-09 did not increase export duty on iron ore.<BR><BR>Some healthcare stocks gained after government proposed a reduction in excise duty on all pharmaceutical goods to 8%, from 16%. Dishman Pharmaceuticals (up 5.96% to Rs 291.40), Apollo Hospitals (up 1.27% to Rs 495.65), Cadila Healthcare (up 3.02% to Rs 260.80), Fortis Healthcare (up 7.44% to Rs 85.25), Aurobindo Pharma (up 6.37% to Rs 329.75), Cipla (up 0.58% to Rs 207.25), moved up. Ranbaxy Laboratories rose 0.27% to Rs 445.75.<BR><BR>The Finance Minister also proposed a five year tax holiday for setting up hospitals in tier II and tier III regions for providing healthcare in rural areas from 1 April 2008.<BR><BR>Shares of four companies related to power transmission & distribution sector were mixed after the Budget announced plans for a national fund for the segment. Power Grid Corporation of India (down 1.57% to Rs 109.70), Kalpataru Power (down 0.86% to Rs 1244.05) edged lower. However, KEC International (up 0.42% to Rs 728.40) and Jyoti Structures (up 0.86% to Rs 205.75) edged higher. The Finance Minister has proposed Rs 800 crore for accelerated power reforms in FY 2009<BR><BR>Shares of five fertiliser firms slipped between 0.24% to 8.7% after Union Budget 2008-09 did not increase subsidy to producers, as expected. Tata Chemicals (down 0.24% to Rs 329.40), Rashtriya Chemicals and Fertilisers (down 4.73% to Rs 84.60), National Fertilizers (down 4.8% to Rs 66.40), Deepak Fertilisers (down 8.7% to Rs 131.25), and Coromandel Fertilisers and Chemicals (down 4.91% to Rs 127.75), edged lower. The government has announced a loan waiver scheme for small farmers, instead of increasing subsidy to producers.<BR><BR>Stocks of the companies that cater to education sector ended mixed after the Finance Minister said the government aims to provide more thrust to the education sector. Navneet Publications India rose 1.97% to Rs 121.35. However Educomp Solutions (down 2.56% to Rs 4250.85), Camlin (down 4.47% to Rs 234) edged lower. Finance Minister P Chidambaram proposed to set up 16 central universities in 2008-09. He also plans to allot more for education, especially at the primary school level. FM proposed 20% hike in education budget this year from Rs 28,674 crore to Rs 34,400 crore.<BR><BR>Nagarjuna Chemicals & Fertilisers clocked a highest volume of 3.58 crore shares on BSE. Reliance Petroleum (1.92 crore shares), IFCI (1.72 crore shares), Chambal Fertilisers and Chemicals (1.49 crore shares) and Reliance Natural Resources (1.33 crore shares) were other volume toppers in that order.<BR><BR>Reliance Petroleum clocked highest turnover of Rs 328.39 crore on BSE. Relaince Industries (Rs 251.55 crore), OnMobile Global (Rs 247.28 crore), State Bank of India (Rs 246.36 crore) and Essar Oil (Rs 245.63 crore) were other turnover toppers in that order.<BR><BR>FM announced a complete waiver of loans for marginal farmers owning land up to one hectare and small farmers owning land up to 1 and 2 hectares. Agricultural loans given by scheduled commercial banks, regional rural banks and co-operative credit institutions up to March 31, 2007 and due for 31 December 2007 that year will be covered under the waiver scheme to address the problem of indebtedness of farmers.<BR><BR>FM said keeping inflation under check is a cornerstone of government policy. He further said pressure on domestic prices is from food articles and the Government is determined to be self-sufficient in food grains. There is a need to manage capital inflows more actively he added.<BR><BR>The Finance Minister (FM) said India has recorded 8% GDP in 12 consecutive quarters.<BR><BR>Agriculture credit doubled in first 2 years of the UPA government, FM said. Agriculture is expected to grow at 2.6% in FY 2008, he said.<BR><BR>He said capital inflows are excess of economic deficit. Government and Reserve Bank of India will jointly take temporary steps to manage capital inflows, the Finance Minister added.<BR><BR>Indian economy, like all developing economies, is being hurt by these global upheavals in prices. We need to be vigilant and be proactive to change our policies, to counter this global problem, FM said. The rise in global oil prices too has hurt us, say the FM.<BR><BR>The FM plans to allot more for education, especially at the primary school level. FM wants India to be a knowledge society. FM said allocation for Bharat Nirman will be raised to Rs 31,280 crore.</DIV>

Sensex sheds 246 points in choppy trade as FM hikes short term capital gains tax

Volatility on the stock market is common on the day of presentation of Union Budget. And it was no exception this time. A strong intra-day ...

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