India Stock Market: Sensex Down 869.65 Points On Monday

Sensex down 869.65 points on Monday (July 6, 2009)
–On disappointing UPA Govt’s Budget
–Budget fails to live up to market expectations
– Increase in MAT spikes across the board sell off

Sensex (^BSESN) fell 869.65 points or 5.8% to 14043.40.
Nifty (^NSEI) fell 258.55 points or 5.8% to 4165.70.
Mid Cap index fell 5.2%. Small Cap fell 4.5%.
BSE 500 was down 5.6%. Sensex losers: 28

All 13 BSE Sectoral indices, 12 posted losses.
Advancers: 551, Decliners: 2020, Unchanged: 62
Advance/Decline ratio: 1:4

Sensex Day’s Range: 15097.87 - 13959.44
Nifty Days Range: 4479.80 - 4133.70
52-Week Range: 15600.30 - 7697.39
52-week change: -10%

Union Budget for FY09-10 disappoints market:
Finance Minister, Pranab Mukherjee presented the first Union budget of UPA (United Progressive Alliance) government, which completely disappointed the Dalal Street. Increase in MAT (minimum alternate tax) and FY10 fiscal deficit estimate at 6.8% of gross domestic product (GDP) spooked the markets. The market was expecting reduction in corporate tax, removal of surcharge on corporate tax, aggressiveness reforms, divestment of fuel prices, 3G and foreign direct investment (FDI) policies, but no such announcements were made.

Sensex losers included Reliance Infra -12.5%, ICICI Bank -10.1%, JP Associates -9.9%, Tata Steel -9.6%, HDFC -9%, L & T -8.9% and State Bank -8.6%.

Sensex gainers were ITC & HUL, which rose 3.2% and 1% respectively.

Bankex dive 8.2 pct:
Banking stocks were the biggest losers today, as the widely traded 6.1%, 2019 paper was trading 5.2% lower at Rs 93.35 post the finance minister increased the fiscal deficit target to 6.8% of GDP for FY10 as against 6.2% set in interim budget.

Banking stocks like ICICI Bank, Axis Bank, SBI, Union Bank, Kotak Mahindra, PNB, Bank of Baroda and HDFC Bank were down 5.9-10%.

Realty tanks 7.3 pct:
Realty stocks like Unitech and DLF were down 8-9%. Indiabulls Real, Omaxe, HDIL, Anant Raj Industries, Parsvnath, Orbit Corporation, Ackruti City, Ansal Properties and Mahindra Life slipped 4-6%.

Capital goods tanks 7 pct:
Capital goods index fell 7% led by Punj Lloyd, L&T, Suzlon Energy, Siemens, BEML, ABB, Bharat Electronics and BHEL, which fell 3.6-9.8%.

Power index nosedive 6.4 pct:
In the power pack, Reliance Infrastructure lost 12.5%. Power Grid Corp, Torrent Power, Tata Power, Reliance Power, GVK Power, Neyveli Lignite, Lanco Infratech, GMR Infra and NTPC slipped 5-10%.

Metal index falls 6.6 pct:
Tata Steel, Ispat Industries, Hindalco, Sterlite Industries, SAIL, Hindustan Zinc, JSW Steel and Jindal Steel were down 5-10%.

Education & Textile shares fall:
Following stocks had rallied ahead of the budget but today they saw correction. Textile stocks like Alok Industries and Arvind fell over 10%. Education stocks like Everonn Systems, NIIT, Aptech and Educomp Solutions were down 11.5-16%.

FMCG was the only sector, which rose 1%.HUL and ITC were the only gainers on the benchmark indices. The duty on paperboard was retained at 4%, which was positive for ITC.

Fertilizers dip:
In the fertiliser’s space, Chambal Fertilisers, Coromandel Fertiliser, Deepak Fertiliser, FACT, GNFC, GSFC, Nagarjuna Fertiliser, National Fertiliser, Oswal Chemical, Rashtriya Chemical and Zuari Inds lost 4.4-10%.

Other sectoral losers were: Oil & Gas -5.8%, PSU -5.5%, Teck -3.9%, Auto 3.3%, IT -2.7%, Healthcare -1.9% and Consumer Durables -1.8%.

Turnover:
Total turnover traded was at Rs 1,25,499.58 crore today; this included Rs 21,528.59 crore from the NSE cash segment, Rs 96,656.53 crore from the NSE F&O and the balance Rs 7,314.46 crore from BSE cash segment.

Volume Shockers:
Unitech 26.53 million shares, Suzlon 22.22 mln shares, GVK Power 19.57 mln shares and IFCI 16.97 mln shares

Buzzers:
Kotak Sensex +20% at Rs 178.20, Tutis Tech +10.3% at Rs 21.35, Farmax Retail +9.9% at Rs 141.65, Liberty Phosphate +9.9% at Rs 22.25 and Kalpena Ind +8.4% at Rs 73.90.

Heavy Losers:
Hi-Tech Gears -17% at Rs 50.55, NIIT -16.3% at Rs 59.15, Bilcare -15.2% at Rs 378.40, Everonn Systems -14.8% at Rs 370.35, Rel Infra -12.5% at Rs 1131.05, Core Projects -12.2% at Rs 116.20 and Educomp -11.9% at Rs 3912.50.

MAT affected shares see heavy selling:
Reliance Infrastructure tanked 12.5%; Reliance Power, Reliance Industries, Reliance Communication crashed on MAT concerns. Minimum Alternate Tax (MAT) increased to 15 per cent of book profits from 10 per cent. The period allowed carrying forward the tax credit under MAT to be extended from seven years to ten years.

Market expectations belied:
The markets were expecting reduction in corporate tax, removal of surcharge on corporate tax, no aggressiveness on reforms, divestment, fuel and FDI policies. Budget failed to meet these expectations.

Market Negatives:
MAT (minimum alternate tax) hiked to 15% of book profit versus 10%.

Positive Announcement:
However, there were some positive announcements like GST (goods and services tax) will be implemented from April 1, 2010; commodities tax to be abolished; FBT (fringe benefit tax) to be abolished; STPI increased for one more year; surcharge of 10% on personal income tax removed etc.

Asian Markets:
Asian markets ended mixed. Shanghai gained 1.2% and Kospi rose 0.63%. However, Hang Seng, Jakarta, Nikkei and Straits Times fell 1.2-1.9%. Taiwan Weighted fell 0.23%.

European Markets:
European markets were quoting: FTSE 100 was -1.2%. The CAC 40: -1.4% and the DAX was -1.4%.

Crude:
Crude was quoting at $64.13 per barrel.

Optimism:
FM also said that the Government would continue to provide further stimulus packages; would increase investment in infrastructure to more than 9% of GDP by 2014 and ensure 4% growth for Indian agriculture.

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