The Sensex moved in a 675-point range and swung between gains and losses more than 10 times during the day, as investors tried to digest the Narendra Modi-led government’s second Budget. Some investors were disappointed as the Budget failed to announce big-bang reforms, while deferment of GAAR and clarity on applicability of Minimum Alternate Tax (MAT) on foreign investors boosted sentiment.
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Shares of private banks rose on Finance Minster Arun Jaitley’s proposal to merge investment limits for foreign portfolio investors (FPI) and foreign direct investors (FDI), freeing more space for foreign investors. The Axis Bank stock rose eight per cent, and ICICI Bank gained three per cent. Shares of ITC, on the other hand, dropped 8.3 per cent as the government proposed to increase the duty on cigarettes.
Analysts said, the market could come under pressure for want of big triggers. “The Budget was keenly watched as a key signal to an expected continuation of the government’s reform agenda… lack of triggers can disappoint the market in the near term,” said Tushar Pradhan, chief investment officer, HSBC India Mutual Fund.
“The market expectations had sky-rocketed... So, I will not be surprised to see a correction of five per cent,” said Nitin Jain, chief executive (retail capital markets), Edelweiss.