Market sees broad based gains in post-budget rally
A day after the announcement of the Union Budget 2016-17, Indian stocks registered solid gains as investors gave thumbs up to no adverse changes on long-term capital gains tax on sale of shares in the Budget, government's thrust on infrastructure sector and decision to stick to the fiscal deficit target for the next fiscal year. The barometer index, the S&P BSE Sensex, jumped 777.35 points or 3.38% to settle at 23,779.35. The 50-unit Nifty 50 index jumped 235.25 points or 3.37% to settle at 7,222.30. The Nifty reclaimed the psychologically important 7,000 level. Index heavyweight and cigarette major ITC and IT, auto and banking sector stocks led the rally for key benchmark indices.
The Sensex and the Nifty, both, settled at their highest level in more than a week. The two key indices hovered in positive zone throughout the trading session. The broad market depicted strength. There were more than three gainers against every loser on BSE. 2,011 shares rose and 589 shares fell. A total of 116 shares were unchanged. The BSE Mid-Cap index rose 3.04%. The BSE Small-Cap index rose 3.23%. Both these indices underperformed the Sensex. All the nineteen sectoral indices on BSE registered gains.
Stock market investors heaved a sigh of relief as there were no adverse changes on the long-term capital gains tax on sale of shares in the Budget. Recent media reports suggested that the government was mulling whether to raise the time frame of long-term capital gains tax on sale of shares to three years from current one year in the Budget. Currently, investors don't have to pay any capital gains tax on shares sold on an exchange after one year of holding. Currently, short-term capital gains tax is 15% if shares are sold within a period of one year from the date of purchase.
Index heavyweight and cigarette major ITC surged on reports that a foreign brokerage has upgraded the stock to to 'buy' from 'sell' as the hike in excise duty on cigarettes in the Union Budget 2016-17 was less than expected. Bank stocks edged higher as the government's decision to stick to the fiscal deficit target and keep its borrowing program down for the next fiscal year has provided room for the Reserve Bank of India (RBI) to cut policy interest rate.
Stocks from cement and steel sector rose on higher allocation to infrastructure sector in the Union Budget 2016-17. Vedanta surged after the company said it has been declared as the successful bidder for Baghmara gold block in Chhattisgarh at royalty rate of 12.55% of value of mineral dispatched.
The Sensex jumped 777.35 points or 3.38% to settle at 23,779.35, its highest closing level since 22 February 2016. The Sensex surged 819.49 points or 3.56% at the day's high of 23,821.49. The barometer index rose 131.18 points or 0.57% at the day's low of 23,133.18.
The Nifty jumped 235.25 points or 3.37% to settle at 7,222.30, its highest closing level since 22 February 2016. The Nifty rose 248.45 points or 3.55% at the day's high of 7,235.50. The index rose 48.05 points or 0.68% at the day's low of 7,035.10.
Among the sectoral indices on BSE, the S&P BSE FMCG index (up 4.9%), the S&P BSE Consumer Durables index (up 4.37%), the S&P BSE Realty index (up 4.21%), the S&P BSE Auto index (up 4.19%), the S&P BSE Industrials index (up 3.86%), the S&P BSE Consumer Discretionary Goods & Services index (up 3.74%), the S&P BSE IT index (up 3.72%), the S&P BSE Bankex (up 3.54%), the S&P BSE Teck index (up 3.53%), the S&P BSE Capital Goods index (up 3.5%) outperfomed the Sensex. The S&P BSE Basic Materials index (up 2.98%), the S&P BSE Finance index (up 2.97%), the S&P BSE Utilities index (up 2.59%), the S&P BSE Metal index (up 2.49%), the S&P BSE Power index (up 2.36%), the S&P BSE Telecom index (up 2.33%), the S&P BSE Oil & Gas index (up 2.29%), the S&P BSE Energy index (up 1.83%) and the S&P BSE Healthcare index (up 1.43%) underperformed the Sensex.
In overseas stock markets, European stocks edged higher, tracking gains in Asian markets. Chinese stocks led gains in Asian markets after China's central bank cut further the reserve requirement ratio by 0.5% in an attempt to calm investor jitters over the world's second largest economy. In mainland China, the Shanghai Composite settled 1.68% higher. In Hong Kong, the Hang Seng index settled 1.55% higher. US stocks closed lower yesterday, 29 February 2016, on late-day selling as investors offloaded energy and health-care shares.
The total turnover on BSE amounted to Rs 4585 crore, lower than turnover of Rs 4656.10 crore registered during the previous trading session.
Index heavyweight and cigarette major ITC surged 10.45% at Rs 326.70 on reports that a foreign brokerage has upgraded the stock to to 'buy' from 'sell' as the hike in excise duty on cigarettes in the Union Budget 2016-17 was less than expected. Shares of ITC had risen 1.65% to settle at Rs 295.80 yesterday, 29 February 2016, shrugging off a hike in excise duty on cigarettes in the Budget. The excise duty on cigarettes has been raised by 10%, which is a big relief compared to the previously two years' hike of 22% and 13%, the brokerage reportedly said in its report.
Finance minister Arun Jaitley announced increase in the excise duties on tobacco products other than beedi by about 10% to 15% in the Union Budget 2016-17.
IT stocks gained on renewed buying. Tech Mahindra (up 3.72%), HCL Technologies (up 2.04%), Wipro (up 2.71%), Infosys (up 4.13%), TCS (up 4.59%) and Oracle Financial Services Software (up 2.12%) edged higher.
Bank stocks edged higher as the government's decision to stick to the fiscal deficit target and keep its borrowing program down for the next fiscal year has provided room for the Reserve Bank of India (RBI) to cut policy interest rate. Among public sector banks (PSU banks), Punjab National Bank (up 3.58%), Bank of Baroda (up 3.41%), Bank of India (up 4.64%), State Bank of India (up 2.84%) and Union Bank of India (up 4.58%) gained.
Finance minister Arun Jaitley in the Union Budget 2016-17, announced Rs 25000 crore for recapitalization of PSU banks in FY 2017, which is same as the amount indicated earlier.
IDBI Bank rose 1.97% at Rs 59.60, with the stock extending previous trading session's gains triggered by Jaitley's statement in the Budget speech that the government has option to reduce stake in IDBI Bank to below 50%. The stock had surged 5.03% to settle at Rs 58.45 yesterday, 29 February 2016, after the finance minister said that the process for transformation of IDBI Bank has already started. IDBI recently received a green signal from stock market regulator Securities and Exchange Board of India (Sebi) to raise up to Rs 3771 crore through a qualified institutional placement (QIP), a move which will dilute the government's holding in the bank. The government holding in the bank stands at 80.16% (as on 31 December 2015).
Among private sector banks, ICICI Bank (up 8%), Yes Bank (up 4.6%), IndusInd Bank (up 3.51%), HDFC Bnak (up 1.28%) and Kotak Mahindra Bank (up 1.63%) edged higher.
Axis Bank rose 4.46% at Rs 392 after the bank said it has purchased 9.57 crore shares or 4.99% equity stake, in Max Life Insurance Company (MLIC) from Max Financial Services (MFSL), formerly known as Max India, and Mitsui Sumitomo Insurance Company (MSI) for a total cash consideration at par of Rs 95.75 crore. Of this, the bank has acquired 7.65 crore shares or 3.99% equity stake in MLIC, from MFSL for an aggregate cash consideration at par of Rs 76.56 crore and 1.91 crore shares or 1% equity stake in MLIC, from MSI for an aggregate cash consideration at par of Rs 19.19 crore, post receipt of requisite regulatory approvals. Consequent to this transaction, Axis Bank's equity stake in MLIC has increased to 5.99%. The announcement was made after market hours yesterday, 29 February 2016.
Shares of Max Financial Services were down 3.39% at Rs 325. MLIC, a joint-venture between MFSL and MSI, was incorporated on 11 July 2000 and is primarily engaged in the business of life insurance in India.
Auto stocks edged higher on renewed buying. Hero MotoCorp (up 6.07%), TVS Motor Company (up 6.61%), Ashok Leyland (up 3.65%), Bajaj Auto (up 2.64%), Tata Motors (up 4.88%) and Eicher Motors (up 1.71%) gained.
Maruti Suzuki India (MSIL) rose 7.98% at Rs 3,501.50. The company during market hours today, 1 March 2016, announced that its total sales declined 0.9% to 1.17 lakh units in February 2016 over February 2015. Domestic sales rose 0.2% to 1.08 lakh units in February 2016 over February 2015. Exports fell 12.4% to 9,336 units in February 2016 over February 2015.
During the last month, the reservation agitation in Haryana had disrupted component supplies, causing a temporary suspension of production by the company. Total production loss due to this was over 10,000 units, MSIL said.
Mahindra & Mahindra (M&M) rose 2.46% at Rs 1,257 after the company said that its total auto sales rose 16% to 44,002 units in February 2016 over February 2015. Domestic sales rose 18% to 41,348 units in February 2016 over February 2015. Exports declined 15% to 2,654 units in February 2016 over February 2015. The company announced the sales volume data during market hours today, 1 March 2016.
Separately, M&M during market hours today, 1 March 2016 announced that its total tractor sales rose 19% to 13,574 units in February 2016 over February 2015. Domestic sales rose 24% to 12,702 units in February 2016 over February 2015. Exports declined 25% to 872 units in February 2016 over February 2015.
Shares of public sector oil marketing companies (PSU OMCs) edged higher after Indian Oil Corporation (IOCL) announced revision in fuel prices with effect from 1 March 2016. BPCL (up 2.88%), HPCL (up 4.63%) and IOCL (up 5.02%) edged higher. Petrol price was cut by Rs 3.02 a litre and diesel price was increased by Rs 1.47 per litre. After the latest price revision, petrol in Delhi now costs Rs 56.61 per litre and diesel costs Rs 46.43 a litre.
Shares of oil exploration and production (E&P) firms were mixed. Cairn India (up 4.1%) and Reliance Industries (up 1.81%) edged higher. Oil India (down 2.26%) and ONGC (down 1.24%) edged lower.
Finance Minister Arun Jaitley in the Union Budget 2016-17 announced that the cess on domestically produced crude oil will be changed from Rs 4,500 per metric tonne to 20% ad valorem. The industry was lobbying to link the cess on oil to an ad valorem rate and was expecting it to be in the range of 8-10%.
Meanwhile, Brent for May settlement was currently up 30 cents at $36.87 a barrel. The contract had risen $1.13 a barrel or 3.18% to settle at $36.57 a barrel during the previous trading session.
Shares of state-run gas transmission and distribution firm GAIL (India) jumped 5.2% to Rs 320.40.
Vedanta rose 6.35% at Rs 75.35 after the company said it has been declared as the successful bidder for Baghmara gold block in Chhattisgarh at royalty rate of 12.55% of value of mineral dispatched. The company would be granted the composite licence that includes both prospecting licence cum mining lease. Vedanta said it has to submit a performance bank guarantee of Rs 1.60 crore and invest in exploration. The block requires extensive exploration and the process will commence in due course, Vedanta said. The announcement was made after market hours yesterday, 29 February 2016.
Steel stocks extended previous trading session's gains triggered by higher allocation to infrastructure sector in the Union Budget 2016-17. Tata Steel (up 3.05%), JSW Steel (up 1.41%), Steel Authority of India (up 3.14%) and Jindal Steel & Power (up 5.15%) edged higher.
Cement stocks rose on renewed buying on higher allocation to infrastructure sector in the Union Budget 2016-17. Shree Cement (up 2.75%), ACC (up 2.95%), Ambuja Cements (up 1.62%) and UltraTech Cement (up 4.28%) gained.
Grasim Industries was up 3.11%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Bharat Heavy Electricals (Bhel) rose 1.7%. Bhel after market hours today, 1 March 2016, said that the company has bagged a large contract worth Rs 5600 crore for a setting up 1,600 megawatts (MW) supercritical power project in Tamil Nadu. The project is slated to be commissioned by September 2019 and the power generated from this 1,600 MW power project will help foster growth in Tamil Nadu and provide easy access to electricity to the people of the state, Bhel said.
The Sensex has fallen 2,336.19 points or 8.94% in calendar year 2016 so far (till 1 March 2016). From a 52-week low of 22,600.39 hit on 12 February 2016, the Sensex has risen 1,179.96 points or 5.22%. The Sensex is off 6,241.39 points or 20.78% from a record high of 30,024.74 hit on 4 March 2015.
After a knee jerk reaction to increase in Securities Transaction Tax (STT) on equity options and levy of tax on dividend for high networth individuals in the Union Budget 2016-17, Indian stocks settled with modest losses yesterday, 29 February 2016, as the government stuck to the 3.5% fiscal deficit target for 2016-17. The government has allotted Rs 2.21 lakh crore for infrastructure development, which is increase of 22.5% over the current fiscal.
The finance minister has stuck to previously announced fiscal deficit targets. The fiscal deficit target of 3.5% of GDP for FY 2016-17 has been retained. Finance Minister Arun Jaitley presented the Union Budget for 2016-17 in the Lok Sabha yesterday, 29 February 2016. The government has also kept the fiscal deficit target of 3.9% of GDP for the current fiscal year. Simultaneously, Jaitley announced the setting up a Committee to review the Fiscal Responsibility and Budget Management (FRBM) Act.
Meanwhile, the outcome of a monthly survey showed that manufacturing business conditions in India continued to improve with new orders, exports, output and purchasing activity all rising in February 2016. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) stood at 51.1 in February 2016, unchanged from January's reading.
The Sensex and the Nifty, both, settled at their highest level in more than a week. The two key indices hovered in positive zone throughout the trading session. The broad market depicted strength. There were more than three gainers against every loser on BSE. 2,011 shares rose and 589 shares fell. A total of 116 shares were unchanged. The BSE Mid-Cap index rose 3.04%. The BSE Small-Cap index rose 3.23%. Both these indices underperformed the Sensex. All the nineteen sectoral indices on BSE registered gains.
Stock market investors heaved a sigh of relief as there were no adverse changes on the long-term capital gains tax on sale of shares in the Budget. Recent media reports suggested that the government was mulling whether to raise the time frame of long-term capital gains tax on sale of shares to three years from current one year in the Budget. Currently, investors don't have to pay any capital gains tax on shares sold on an exchange after one year of holding. Currently, short-term capital gains tax is 15% if shares are sold within a period of one year from the date of purchase.
Index heavyweight and cigarette major ITC surged on reports that a foreign brokerage has upgraded the stock to to 'buy' from 'sell' as the hike in excise duty on cigarettes in the Union Budget 2016-17 was less than expected. Bank stocks edged higher as the government's decision to stick to the fiscal deficit target and keep its borrowing program down for the next fiscal year has provided room for the Reserve Bank of India (RBI) to cut policy interest rate.
Stocks from cement and steel sector rose on higher allocation to infrastructure sector in the Union Budget 2016-17. Vedanta surged after the company said it has been declared as the successful bidder for Baghmara gold block in Chhattisgarh at royalty rate of 12.55% of value of mineral dispatched.
The Sensex jumped 777.35 points or 3.38% to settle at 23,779.35, its highest closing level since 22 February 2016. The Sensex surged 819.49 points or 3.56% at the day's high of 23,821.49. The barometer index rose 131.18 points or 0.57% at the day's low of 23,133.18.
The Nifty jumped 235.25 points or 3.37% to settle at 7,222.30, its highest closing level since 22 February 2016. The Nifty rose 248.45 points or 3.55% at the day's high of 7,235.50. The index rose 48.05 points or 0.68% at the day's low of 7,035.10.
Among the sectoral indices on BSE, the S&P BSE FMCG index (up 4.9%), the S&P BSE Consumer Durables index (up 4.37%), the S&P BSE Realty index (up 4.21%), the S&P BSE Auto index (up 4.19%), the S&P BSE Industrials index (up 3.86%), the S&P BSE Consumer Discretionary Goods & Services index (up 3.74%), the S&P BSE IT index (up 3.72%), the S&P BSE Bankex (up 3.54%), the S&P BSE Teck index (up 3.53%), the S&P BSE Capital Goods index (up 3.5%) outperfomed the Sensex. The S&P BSE Basic Materials index (up 2.98%), the S&P BSE Finance index (up 2.97%), the S&P BSE Utilities index (up 2.59%), the S&P BSE Metal index (up 2.49%), the S&P BSE Power index (up 2.36%), the S&P BSE Telecom index (up 2.33%), the S&P BSE Oil & Gas index (up 2.29%), the S&P BSE Energy index (up 1.83%) and the S&P BSE Healthcare index (up 1.43%) underperformed the Sensex.
In overseas stock markets, European stocks edged higher, tracking gains in Asian markets. Chinese stocks led gains in Asian markets after China's central bank cut further the reserve requirement ratio by 0.5% in an attempt to calm investor jitters over the world's second largest economy. In mainland China, the Shanghai Composite settled 1.68% higher. In Hong Kong, the Hang Seng index settled 1.55% higher. US stocks closed lower yesterday, 29 February 2016, on late-day selling as investors offloaded energy and health-care shares.
The total turnover on BSE amounted to Rs 4585 crore, lower than turnover of Rs 4656.10 crore registered during the previous trading session.
Index heavyweight and cigarette major ITC surged 10.45% at Rs 326.70 on reports that a foreign brokerage has upgraded the stock to to 'buy' from 'sell' as the hike in excise duty on cigarettes in the Union Budget 2016-17 was less than expected. Shares of ITC had risen 1.65% to settle at Rs 295.80 yesterday, 29 February 2016, shrugging off a hike in excise duty on cigarettes in the Budget. The excise duty on cigarettes has been raised by 10%, which is a big relief compared to the previously two years' hike of 22% and 13%, the brokerage reportedly said in its report.
Finance minister Arun Jaitley announced increase in the excise duties on tobacco products other than beedi by about 10% to 15% in the Union Budget 2016-17.
IT stocks gained on renewed buying. Tech Mahindra (up 3.72%), HCL Technologies (up 2.04%), Wipro (up 2.71%), Infosys (up 4.13%), TCS (up 4.59%) and Oracle Financial Services Software (up 2.12%) edged higher.
Bank stocks edged higher as the government's decision to stick to the fiscal deficit target and keep its borrowing program down for the next fiscal year has provided room for the Reserve Bank of India (RBI) to cut policy interest rate. Among public sector banks (PSU banks), Punjab National Bank (up 3.58%), Bank of Baroda (up 3.41%), Bank of India (up 4.64%), State Bank of India (up 2.84%) and Union Bank of India (up 4.58%) gained.
Finance minister Arun Jaitley in the Union Budget 2016-17, announced Rs 25000 crore for recapitalization of PSU banks in FY 2017, which is same as the amount indicated earlier.
IDBI Bank rose 1.97% at Rs 59.60, with the stock extending previous trading session's gains triggered by Jaitley's statement in the Budget speech that the government has option to reduce stake in IDBI Bank to below 50%. The stock had surged 5.03% to settle at Rs 58.45 yesterday, 29 February 2016, after the finance minister said that the process for transformation of IDBI Bank has already started. IDBI recently received a green signal from stock market regulator Securities and Exchange Board of India (Sebi) to raise up to Rs 3771 crore through a qualified institutional placement (QIP), a move which will dilute the government's holding in the bank. The government holding in the bank stands at 80.16% (as on 31 December 2015).
Among private sector banks, ICICI Bank (up 8%), Yes Bank (up 4.6%), IndusInd Bank (up 3.51%), HDFC Bnak (up 1.28%) and Kotak Mahindra Bank (up 1.63%) edged higher.
Axis Bank rose 4.46% at Rs 392 after the bank said it has purchased 9.57 crore shares or 4.99% equity stake, in Max Life Insurance Company (MLIC) from Max Financial Services (MFSL), formerly known as Max India, and Mitsui Sumitomo Insurance Company (MSI) for a total cash consideration at par of Rs 95.75 crore. Of this, the bank has acquired 7.65 crore shares or 3.99% equity stake in MLIC, from MFSL for an aggregate cash consideration at par of Rs 76.56 crore and 1.91 crore shares or 1% equity stake in MLIC, from MSI for an aggregate cash consideration at par of Rs 19.19 crore, post receipt of requisite regulatory approvals. Consequent to this transaction, Axis Bank's equity stake in MLIC has increased to 5.99%. The announcement was made after market hours yesterday, 29 February 2016.
Shares of Max Financial Services were down 3.39% at Rs 325. MLIC, a joint-venture between MFSL and MSI, was incorporated on 11 July 2000 and is primarily engaged in the business of life insurance in India.
Auto stocks edged higher on renewed buying. Hero MotoCorp (up 6.07%), TVS Motor Company (up 6.61%), Ashok Leyland (up 3.65%), Bajaj Auto (up 2.64%), Tata Motors (up 4.88%) and Eicher Motors (up 1.71%) gained.
Maruti Suzuki India (MSIL) rose 7.98% at Rs 3,501.50. The company during market hours today, 1 March 2016, announced that its total sales declined 0.9% to 1.17 lakh units in February 2016 over February 2015. Domestic sales rose 0.2% to 1.08 lakh units in February 2016 over February 2015. Exports fell 12.4% to 9,336 units in February 2016 over February 2015.
During the last month, the reservation agitation in Haryana had disrupted component supplies, causing a temporary suspension of production by the company. Total production loss due to this was over 10,000 units, MSIL said.
Mahindra & Mahindra (M&M) rose 2.46% at Rs 1,257 after the company said that its total auto sales rose 16% to 44,002 units in February 2016 over February 2015. Domestic sales rose 18% to 41,348 units in February 2016 over February 2015. Exports declined 15% to 2,654 units in February 2016 over February 2015. The company announced the sales volume data during market hours today, 1 March 2016.
Separately, M&M during market hours today, 1 March 2016 announced that its total tractor sales rose 19% to 13,574 units in February 2016 over February 2015. Domestic sales rose 24% to 12,702 units in February 2016 over February 2015. Exports declined 25% to 872 units in February 2016 over February 2015.
Shares of public sector oil marketing companies (PSU OMCs) edged higher after Indian Oil Corporation (IOCL) announced revision in fuel prices with effect from 1 March 2016. BPCL (up 2.88%), HPCL (up 4.63%) and IOCL (up 5.02%) edged higher. Petrol price was cut by Rs 3.02 a litre and diesel price was increased by Rs 1.47 per litre. After the latest price revision, petrol in Delhi now costs Rs 56.61 per litre and diesel costs Rs 46.43 a litre.
Shares of oil exploration and production (E&P) firms were mixed. Cairn India (up 4.1%) and Reliance Industries (up 1.81%) edged higher. Oil India (down 2.26%) and ONGC (down 1.24%) edged lower.
Finance Minister Arun Jaitley in the Union Budget 2016-17 announced that the cess on domestically produced crude oil will be changed from Rs 4,500 per metric tonne to 20% ad valorem. The industry was lobbying to link the cess on oil to an ad valorem rate and was expecting it to be in the range of 8-10%.
Meanwhile, Brent for May settlement was currently up 30 cents at $36.87 a barrel. The contract had risen $1.13 a barrel or 3.18% to settle at $36.57 a barrel during the previous trading session.
Shares of state-run gas transmission and distribution firm GAIL (India) jumped 5.2% to Rs 320.40.
Vedanta rose 6.35% at Rs 75.35 after the company said it has been declared as the successful bidder for Baghmara gold block in Chhattisgarh at royalty rate of 12.55% of value of mineral dispatched. The company would be granted the composite licence that includes both prospecting licence cum mining lease. Vedanta said it has to submit a performance bank guarantee of Rs 1.60 crore and invest in exploration. The block requires extensive exploration and the process will commence in due course, Vedanta said. The announcement was made after market hours yesterday, 29 February 2016.
Steel stocks extended previous trading session's gains triggered by higher allocation to infrastructure sector in the Union Budget 2016-17. Tata Steel (up 3.05%), JSW Steel (up 1.41%), Steel Authority of India (up 3.14%) and Jindal Steel & Power (up 5.15%) edged higher.
Cement stocks rose on renewed buying on higher allocation to infrastructure sector in the Union Budget 2016-17. Shree Cement (up 2.75%), ACC (up 2.95%), Ambuja Cements (up 1.62%) and UltraTech Cement (up 4.28%) gained.
Grasim Industries was up 3.11%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Bharat Heavy Electricals (Bhel) rose 1.7%. Bhel after market hours today, 1 March 2016, said that the company has bagged a large contract worth Rs 5600 crore for a setting up 1,600 megawatts (MW) supercritical power project in Tamil Nadu. The project is slated to be commissioned by September 2019 and the power generated from this 1,600 MW power project will help foster growth in Tamil Nadu and provide easy access to electricity to the people of the state, Bhel said.
The Sensex has fallen 2,336.19 points or 8.94% in calendar year 2016 so far (till 1 March 2016). From a 52-week low of 22,600.39 hit on 12 February 2016, the Sensex has risen 1,179.96 points or 5.22%. The Sensex is off 6,241.39 points or 20.78% from a record high of 30,024.74 hit on 4 March 2015.
After a knee jerk reaction to increase in Securities Transaction Tax (STT) on equity options and levy of tax on dividend for high networth individuals in the Union Budget 2016-17, Indian stocks settled with modest losses yesterday, 29 February 2016, as the government stuck to the 3.5% fiscal deficit target for 2016-17. The government has allotted Rs 2.21 lakh crore for infrastructure development, which is increase of 22.5% over the current fiscal.
The finance minister has stuck to previously announced fiscal deficit targets. The fiscal deficit target of 3.5% of GDP for FY 2016-17 has been retained. Finance Minister Arun Jaitley presented the Union Budget for 2016-17 in the Lok Sabha yesterday, 29 February 2016. The government has also kept the fiscal deficit target of 3.9% of GDP for the current fiscal year. Simultaneously, Jaitley announced the setting up a Committee to review the Fiscal Responsibility and Budget Management (FRBM) Act.
Meanwhile, the outcome of a monthly survey showed that manufacturing business conditions in India continued to improve with new orders, exports, output and purchasing activity all rising in February 2016. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) stood at 51.1 in February 2016, unchanged from January's reading.
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