Th market is expected to stay on the sidelines ahead of a key event –The Union Budget 2007-08, which will be presented in Parliament on Wednesday (28 February 2007). The market will take directions, depending on the announcements made at the annual event.
Caution on the bourses is evident in that the market-breadth has turned weak, whenever the key indices have corrected over the past few days. Concerns that the government may raise short-term capital gains tax on sale of shares from the current 10% have gained currency. The securities transaction tax (STT) may also go up further. The STT was raised in the previous budget. The removal of 10% corporate surcharge may be offset by removal of certain open-ended exemptions.
Market men expect the finance ministry to give a big impetus to agriculture and infrastructure in the budget.
Also, the Railway Budget will be announced on 26 February 2007. It is also closely watched by market players as some sectors are directly or indirectly impacted due to the announcements made. Continuing the trend witnessed during the past two years of the UPA government, Lalu Yadav is all set to present his third "people friendly" Railway Budget in which no hike is expected in ordinary class passenger fares or freight rates.
Crude oil prices have started going up, and have reached above $60 per barrel. Any sharp upmove may dampen the sentiment further.
Visaka Industries, Crisil, Peninsula Land, Alfa Laval India, ESAB India, Vesuvius India and 3M India will be announcing their December quarterly results