While market participants described the Budget as ‘balanced', the stock market was in no mood to cheer. The Bombay Stock Exchange (BSE) 30-Share Index dipped by 209.65 points or 1.19 per cent to close at 17,466.20.
“The impact of the Budget on the stock market should, by and large, be neutral,” said HemantKanawala, Head of Equities, Kotak Mahindra Old Mutual Life Insurance.
Although the fiscal deficit for 2012-13 announced by the Finance Minister was in line with the expectations, borrowing required by the government was on the higher side. This could postpone the monetary easing cycle by the RBI and, thereby, impacting banking and investment sectors, Mr. Kanawal added.
The benchmark BSE Sensex opened at 17,656.81 compared to its Thursday's close of 17,675.85, touched a low of 17,426.58 and a high of 17,871 during the Budget presentation.
There were not many sector-specific changes in the tax rates apart from increase in royalty on crude oil, which will impact upstream oil companies.
The fall on the exchanges was led by oil and gas stocks with 3.32 per cent drop, followed by power, consumer goods, PSUs and metals. Except FMCG and auto, all sectoral indices ended in the negative territory.
On the National Stock Exchange, the S&P CNX Nifty index closed at 5,317.90 with a loss of 62.60 points or 1.16 per cent.
The Budget has made balanced efforts to provide boost to the economy and equity markets,
There is also an attempt to attract more interest in equity markets through reduction in Securities Transaction Tax and introduction of the Rajiv Gandhi Equity Scheme, targeted at retail investors. For the stock market, the measures of tax benefits to increase investor penetration, 20 per cent cut in STT, electronic voting for the shareholders and IPO through electronic mode will have direct and indirect benefits.
