· The key benchmark indices extended gains to hit fresh intraday highs in mid-afternoon trade after finance minister Pranab Mukherjee offered to progressively cut budget deficit over the next three fiscal years, changed personal tax rates which will lift disposable incomes in the hand of individuals and reduced surcharge on corporate tax for domestic companies to 7.5% from 10% in Union Budget 2010-2011 late last week. Data showing a surge in manufacturing activity in the month of February and rise in exports for the third consecutive month in January also lifted sentiment. The S&P CNX Nifty crossed the psychological 5,000 mark.
· The market surged in early trade tracking overnight gains in global stocks when the Indian market was closed for the Holi festival. Index heavyweight Reliance Industries rose on reports of a possible acquisition of Canada's Value Creation. Auto stocks extended Friday's sharp gains on robust vehicle sales in the month of February 2010 over February 2009. Banking, metal and telecom stocks also rose. Barring the realty index, all the other sectoral on indices on BSE were in green.
· Prime Minister Manmohan Singh on Monday ruled out rolling back a price hike in retail fuel prices despite pressure from his main allies, saying populist policies would hurt the economy in the long-term. Petrol prices rose about 6% and diesel prices by 7.75% after the government increased excise duties and import duties on the fuels in Union Budget 2010-2011, which stressed fiscal prudence to cut a wide deficit.
· Auto stocks extended Friday's sharp gains as the government hiked the excise duty by 2% to 10% from 8% earlier. This came as a relief as the industry was fearing a 4% hike. A thrust on infrastructure and higher rural spending also augur well for the auto sector. Another minor positive for auto companies was higher slabs for personal income tax that would leave more finance in hands of individuals.
· Banking stocks gained after the finance minister said RBI is considering giving some additional banking licenses to private sector players. Shares of state-run bank got a boost from the Finance Minister's proposal to provide Rs 16500 crore for recapitalisation to enable them to maintain minimum capital adequacy at 8% in tier I capital by 31 March 2011.
· Telecom stocks rose after Sam Pitroda, Prime Minister's Information Technology Advisor, on Saturday reportedly said that the Government expects to complete the 3G auction within the next two months, enabling operators to roll-out their services soon.
· Metal shares rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.76% to 3,371.90 on Monday, 1 March 2010. Copper fell on Tuesday, after surging to five-week highs in the previous session, as concerns over supply from top producer Chile eased after the mines there reopened following a massive weekend earthquake. Copper, used largely in power and construction, is considered a gauge of the economic activity.
· Shares of cement firms gained on BSE, on reports cement companies across all capacities have hiked prices in the range of Rs 10-12 a bag, to offset the twin effects of the excise duty hike and the rise in diesel price. Last week, the finance minister hiked the excise duty on cement and cement products in the Union Budget 2010-2011. The government also hiked the petrol prices by about 6% and diesel prices by 7.75% after the government increased excise duties and import duties on the fuels in Union Budget 2010-2011.
· The market breadth, indicating the overall health of the market, was strong. On BSE, 2063 shares rose as compared with 766 that declined. A total of 72 shares remained unchanged.
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Management lies in dropping the last alphabet: manage – men. still better, drop one more alphabet: manage – me.
Samir Kumar Shah.
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