Sensex Slides 44.39 Points

Stock indices fluctuated all through the day as hopes and euphoria in the pre-budget session turned into dismay post budget, as the market felt let down by the tone of the budget and the policy prescriptions.

The BSE sensex closed at 3,642, down 44.39 points over the previous close of 3,686.39, although the figure does not indicate the volatility witnessed during the day. The sensex touched a high of 3,823 in the pre-budget session and then started to slide.

Most of the volatility was witnessed in the post-budget session as market players were undecided whether the budget was industry-friendly or disappointing from the capital markets point of view.

"It is a plain vanilla budget as far as the stock markets are concerned. The major disappointment is that two of the key expectations _ buy back of shares and reduction of long term capital gains for local investors_have not been met. However, there is nothing negative about the budget. Most of the panic has been created by operators who have offloaded their stocks in a hurry. The market should move in a narrow range of 3,660-3,850 during the week," says R Ramachandran, executive director, Dresdner Klienwort Benson Securities (India).

The euphoria of the pre-budget session vanished as soon as it became evident that buyback of shares would not be introduced. The market started sliding rapidly as operators rushed in to liquidate their long positions.

"The post budget session crash in indices was due to over expectations from the budget. Once a clear analysis of the budget emerges the market should stabilise. There does not sem a major downslide from the current levels, however the upside too has been capped at the same time. In the medium term, the positive impact of the industry-friendly budget should be felt," says Nischal Maheshwari, CEO, Apple Asset Management

"Market movement should become sector specific in the next few trading sessions. There could be good amount of activity in the software, steel and cement scrips as these sectors have been the beneficiaries in the budget," says Ketan Jhaveri, vice-president, Kotak Securities.