Money on the markets
A maturing market amid the mayhem
When the finance minister presents the budget, the stock market moves one way or the other.
And like every year this will dominate the news.
Over there and everywhere.
Is that fair? Or convincing?
Some of the analysis will follow a pattern.
If the stock market goes up, the budget may be described as successful because it didn’t “rock the boat”.
If it moves sideways, it may be said the market had already absorbed the good news — the growth figures for instance.
If it moves down — the fiscal deficit may be the reason.
If the finance minister withdraws the stimulus it may not be good (for some) because it may mean more taxes and hence less profit.
After gaining nearly 2 percent during trade, the benchmark index pared gains and closed just 80.5 points higher at 8902, as cuts in factory gate duty and service tax triggered short covering ahead of the expiry of monthly derivatives contracts.
The day belonged to auto and metal stocks, which appeared attractive on expectation the duty cuts on Tuesday will boost sales.
The BSE Auto Index closed 3 percent higher and the BSE Metal Index ended 1.2 percent up. Apollo Tyres, Tata Motors (trucks) and Ashok Leyland have slashed prices after yesterday’s announcement.
The BSE Sensex fell in early trade but pared losses to close 0.3 percent down on Wednesday as the much-awaited U.S. stimulus package failed to shore up investor sentiment globally.
Investors were disappointed with the $838 billion stimulus bill passed by the U.S. Senate on Tuesday and their reaction clearly showed greater concern about financial security.
The BSE Sensex today shrugged off shaky early trade and ended 0.6 percent higher on speculation the government would announce an economic stimulus plan in its interim budget.
On the global front, World stocks fell after five days of gains as investors fretted over U.S. plans to boost the economy and save its banks.
The BSE Sensex ended on a strong note on Monday, extending gains to more than 3 percent on hopes of fresh economic stimulus measures and another round of rate cuts by the Reserve Bank of India (RBI).
Gains were led by heavyweights like Reliance Industries, which was up 3.3 percent; ICICI Bank, which rose 5.1 percent, and State Bank of India which added 2.6 percent.