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Market Report

Thursday, 28-Feb-2013

NSE

  • After a higher start, the Sensex tumbled by 290.87 points, or -1.52 per cent to settle at 18,861.54 today, its lowest level since November 27. In a volatile trade, the gauge recorded its second biggest loss this month after February 21 when it tumbled 317 points. Similarly, the National Stock Exchange index Nifty dropped by 103.85 points, or -1.79 per cent to close at 5,693.05 today.

  • Elsewhere in Asia, however, markets remained strong with investors keying into comments from the head of the US Federal Reserve emphasizing an ongoing commitment to monetary stimulus. Most of Europe is also trading strong in the morning.

  • Markets gave thumbs-down to Finance Minister P Chidambaram's Budget 2013-14, with BSE benchmark Sensex nosediving 291 points to close below 19,000 level as FII tax issues and new surcharge on domestic corporates left investors disappointed. The Nifty closed below 5700. Market sentiment dampened after higher-than-expected borrowing programme and expenditure for 2013-14 raised worries over high inflation and growth.

  • There are two major negatives in the Budget, say Analysts. Firstly, in the background of the confusion created by GAAR last year, to revive a controversial aspect related to investment via the Mauritius route is likely to confuse the market. The sooner clarity emerges on this count, the better it is. Second, while the attempt to limit the fiscal deficit in FY14 at 4.8 per cent is laudable, the gross borrowing programme of almost Rs. 6.3 trillion may crowd out the private sector from the debt market, point out Analysts.

  • The high gross borrowing and the higher spending is going to be inflationary and RBI would rather think of slowing the pace of monetary easing rather than increasing it, said Rupa Rege Nitsure, Chief Economist, Bank of Baroda.

  • It is a bit frustrating to see a new set of concerns on FII taxation which could cause uncertainty unless quickly resolved, said Sandeep Nanda, CIO, Bharti AXA Life Insurance.

  • One point to notice is the huge volumes today. Take a look at our 'Market Statistics' page and compare today's total and FII/DII volumes with any of the last few days. Such high volumes, in both selling and buying, suggest that faith in our markets is not lost.

NIFTY 3-Month

(Data/Charts courtesy NSEI/Yahoo!/iCharts/The Economic Times)