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| A day after Budget, Sensex moves up |
| BS Reporter / Mumbai Jul 08, 2009, 00:27 IST |
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Auto, FMCG indices rise over 3 per cent as the index gains 127 points.
After expressing disappointment with the Union Budget yesterday, stock market indices rose by slightly less than a percentage point today.
Earlier in the day, Macquarie Group raised its April 2010 target for main Indian stock indices by 20 per cent, saying markets “overreacted” yesterday after the government forecast its highest Budget deficit in 16 years. The report said the Bombay Stock Exchange Sensitive Index, or Sensex, might climb up to 18,000, aided by “pro-growth Budget”.
Meanwhile, continued worries about recovery in global economies continued to plague international markets. The Nasdaq closed at 1,787.40, down 9.12 points, or 0.51 per cent, while the Dow Jones closed at 8,324.87, adding 44.13 points, or 0.53 per cent.
The Asian market reflected these global cues. The Hang Seng dropped 0.65 per cent to 17,862.27. Japan’s Nikkei declined 0.34 per cent to 9,648.
The Sensex added 127.05 points, or 0.90 per cent, to end at 14,170.45. The S&P Nifty gained 36.45 points, or 0.88 per cent, to close at 4,202.15.
But the breadth was negative. Out of 3,902 traded stocks, 2,245 declined, just 1,528 advanced while 129 were unchanged.
Automobile and FMCG indices were up by over 3 per cent. The auto sector gained the most, primarily because of double-digit sales figures for Mahindra & Mahindra and Maruti in June. Following the government’s announcement of rise in spending in rural areas and no reversal in excise duty cuts, shares of FMCG companies also rose.
Jaiprakash Associates surged 6.65 per cent to Rs 205.95. ITC rallied 6.72 per cent to Rs 211.10 after the Budget did not hike the excise duty on cigarettes.
Hero Honda and Mahindra & Mahindra gained around 5.80 per cent and 5.45 per cent, respectively. Maruti was up 4.34 per cent.
Sensex heavyweight Reliance Industries dropped the most (by 2.02 per cent to Rs 1,855.35) after the Supreme Court issued notices to RIL, RNRL and the government in the dispute over supply of gas from the K-G basin. Other laggard included Tata Power and ONGC, which shed 1.96 per cent and 1.91 per cent, respectively.
Market experts said with the big event (the Budget) out of the way, stock markets would look for fresh triggers. DD Sharma, senior vice-president, Anand Rathi Securities, said, “Given that the global cues are quite weak, the market can reverse this negative trend only if there is some positive announcement from the government regarding reforms and foreign direct investment. Otherwise, it will continue to weaken.”
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