Markets pare gains

The markets have pared gains now. The Sensex is up 91 points at 17,791, as against the day's high of 17,983. The Nifty is up 32 points at 5336.
__________________________________________________
(Updated at 1143 hrs)

The markets are going strong as the finance minister Pranab Mukherjee has moved from sharing his broad economic vision to laying down the finer contours of policy proposals. The Sensex is back within striking  distance of the 18k mark at 17948, higher by 245 points or 1.5% and the Nifty is at 5382, up 78 points. The midcap index is at 6448, higher by 94 points and the smallcap index is at 7896, up 107 points.

The finance minister began his budget speech by praising the remarkable resilience of the economy and predicted a decline in the average inflation and economic growth rate of 9% next year. He highlighted the fact that preparations for GST rollout were in the final stages and DTC would come into force in April 2012. He also pointed out that exports were up 9.4% in 2010-11, agricultural growth stood at 5.4% and industry was 8.1% in 2010-11. Moreover, we now have a   divestment target at Rs 40,000 crore for FY12 and a cut in the state-level fiscal deficit to 3%  of gross state GDP by 2014.

Meanwhile, the GDP rose by 8.2% for the December 2010 quarter as against 7.3% in the corresponding period of the previous year, but slowed down from the previous quarter's figures of 8.9%. The mining sector growth stood at 6% vs 5.2% on a y-o-y basis and the farm sector growth shot up to 8.9% vs -1.6% during the period, while the construction sector declined marginally to 8% from 8.3%.

On the global front, the Asian markets are having a mixed session of trade. While the Hang Senhg are trading higher by nearly a percent each, the Seoul and Straits Times indices are down in the region of about half a percent each.

L&T has extended its gains and has now strengthened by 2.8% at Rs 1557 to lead the gainers list on the BSE. HDFC has added 2.7% at Rs 644 and ONGC has added 2.7% at Rs 270. The shares of infrastructure companies are trading higher as the FM has announced plans to infra bonds worth Rs 30,000 crore  to boost the infrastructure sector.  IVRCL Infrastructure, IRB Infrastructure, Reliance Industrial Infrastructure, GMR Infrastructure, GVK Power and Infrastructure and Jaypee Infratech are trading higher by 3% each on the Bombay Stock Exchange (BSE). And fertiliser stocks are trading firm on the bourses after the Finance Minister Pranab Mukherjee announced that government is mulling nutrient based subsidy policy for urea and cash subsidy for urea. Among individual stocks, National Fertilisers, Coromandel Fertilisers, Zuari Industries, FACT, GSFC, SPIC, Chambal Fertilisers and RCF are trading higher by 2-7% on the Bombay Stock Exchange (BSE).

On the other hand, select auto shares continue to trade lower. Hero Honda Motors has weakened by 2.6% at Rs 1460 to top he losers list on the BSE. Tata Motors has slid by 2.5% at Rs 1077 and Bajaj Auto has lost 0.8% at Rs 1274.

The market breadth is positive. Out of 2289 stocks traded on the BSE, there are 1558 advancing stocks as against 647 declines.