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Saturday, March 01, 2008

Budget Impact Analysis 2008


Budget Impact Analysis - 2008







Monday Jolt Likely


Specifically for Monday, we see a gap-down opening after a fairly bad close on Wall Street on Friday in the wake of fresh bad news on the US economy and the financial sector mess. With the budget out of the way, the focus in the market will once again turn to global events, though the aftereffects of the budget will continue to linger for a while. We expect sector-specific action in the coming days on the back of announcements in the budget. However, the same may taper off soon and the market is likely to remain choppy and rangebound amid persistent global uncertainties. We will have sun outage from March 4 till March 18. Historical evidence suggests that the Indian market tends to be sluggish and lackluster during the sun outage. Its being called a year of consolidation after a 4-5 year rally. In light of that prediction, we see the market struggling for a quite a while before any meaningful rebound takes place. A major recovery and a return to earlier record peaks is possible only if FII inflows resume in a big way. Also, the confidence among retail investors needs to be restored.

Union Budget - Ajit Dayal


The greatest thing about India is the joint family system. The elders are always there to look after the younger members. The strong are always there to help the weak. When a relative - no matter how distant - is out of luck and falls on bad times, the patriarch places a hand on the sunken shoulders of the disappointed young man, pats him on the cheek, and says to the young man, “Fikr na karo, beta, hum hain na.” Reassured by the patriarch the young man gets a new zest of life and is happy to face the world again. We have seen this scene so many times in Bollywood films. And have cried in happiness.

And now we see this “Do not worry, my son, I am there” approach in the budget. This is not an election budget. This is a “joint family” budget. A Hindu Undivided Family (HUF) budget. With “Hindu” not being used in terms of religion but a geographical description of those who lived by the banks of River Indus. Hence, the word Hindu; hence, the country Hindustan.

Any budget, any action by the family patriarch, is an attempt to balance the need of one group against the demands of another. Many of the budgets – and government policies - in the past have been skewed. They have either robbed the rich to pay the poor (nationalisation or penalty rates of taxation) or they have gifted corporate India at the cost of others (cutting tax rates for corporate India, introducing land grab schemes like the SEZ, and not investing in schools and teachers and health for the poor). This budget brings the patriarch-ruled HUF system to the fore. And as the patriarch announces his generosity to one group, the others – in an ideal situation of family harmony - should smile.

But this is the modern India, the one with mobile labour, fractured families, and a country with the new in-your-face arrogance that sees the glass as half empty because you drank their rightful share of the water. Family harmony is what you saw in the old movies while you ate your salty popcorn - now it is the serials that pollute our innocence while we eat our Jain pizzas.

So when the Rs 60,000 crores of loans given to small farmers was declared as a gift and no longer needed to be repaid, there was a spontaneous flow of tears. But – unlike the films in Bollywood - the spontaneous crying from all of us city folks glued on to ticker-tape TV was not in happiness, but more in protest. The BSE-30 Index took a vertical drop and plunged to a new intra-day low. For a minute (and that is the time horizon of most viewers of TV serials these days) it looked like this drop was going to force everyone to change the scale of their graphs to accommodate what could be a circuit down move. A red blooded -10% day. A Freaky Friday.

But then a few minutes later, the Finance Minister announced an across the board reduction in the effective tax rates for the more fortunate. Later at a press conference he indicated that this reduction in tax rates was going to reduce taxes by Rs 4,000 for the lowest slab of tax payers; Rs 24,000 for the next slab; and Rs 44,000 for the third slab. The graph of the BSE-30 Index recovered. The weeping seemed to be in happiness. It was the patriarch’s hand on the shoulder telling the young man that he could go out and shop a bit. Or save more for the future. A -10% blood bath seemed impossible now as the collective cheers of salaried people heaved the Index northwards. We could not hear the farmers’ voices as they probably were not aware what was happening or were too busy trying to find water to drink. In nay case, there was no TV channel interviewing them.

Taking a cue from the Bollywood movies again, the Finance Minister was ready for the next twist and turn in his plot. This time he said that the short term capital gains tax would be increased from 10% to 15%. The 300,000 punters that mis-represent India’s capital markets did not take kindly to that. The knocked the Index down again. I wish the tax had gone to 30%, frankly, to take the punters and their excess liquidity out of the system.

The details of the budget and all the minute tax implications for various companies will be agonisingly scrutinised for the next few months as it winds its way through the Parliamentary process to become a Bill. But that is not material. What is material is that the movements of the Index as the markets absorbed the 3 important items (loan write-off for farmers, changes in the effective rate of personal income tax, and the short term capital gains tax) confirmed that there are two Indias.

There is the Index-watching India that is focused on its wealth and has a voice which can ask questions to a Finance Minister. And then there is the other India – the one which can only commit suicide to be heard.

The reality is that there is an HUF budget required in India every year for the next two decades. There are over 400 million people who need to climb up the economic ladder. Those who have the market cap, need to pay for it. We cannot hide – or fight – that reality. We need a patriarch in the HUF, a generous karta. Finance Minister Chidambaram and his government have recognised their role and may they have much success. And now we need another 19 HUF budgets.

By Ajit Dayal, Director, Quantum Mutual Fund





Budget Analysis - 2008


Budget Analysis - 2008

Weekly Watch - March 1 2008


Weekly Watch - March 1 2008

Markets - Weekly Wrap


The 30 share index, Sensex, gained 229.65 points during the week ended Feb. 29, 2008, to close at 17,578.72, whereas the broad based NSE Nifty advanced 112.75 points to close at 5,223.50.


On Monday, the BSE Sensex ended the day with a gain of 301.50 points, or 1.74%, at 17,650.57, while the broad-based NSE Nifty closed at 5,200.70, up 89.95 points, or 1.76%. The 30-share benchmark index opened with a positive gap of 174.74 points at 17,523.81 on account of good global cues in the early trades. Later, the index fell into the negative and traded for a long period in the negative terrain. However, the index recovered and moved up in the positive zone. The index proceeded to trade high on the back of intense buying interest in frontline stocks before the final hour of the closing to touch a high of 17,674.06.

On Tuesday, the BSE Sensex ended the day with a gain of 155.62 points, or 0.88%, at 17,806.19, while the broad-based NSE Nifty closed at 5,270.05, up 69.35 points, or 1.33%. The 30-share benchmark index, Sensex, opened with a positive gap of 148.99 points at 17,799.56 mirroring buoyant global cues in the early trades. Finally, the index closed on a firm note after touching an intraday high of 17,860.10.

On Wednesday, BSE Sensex ended the day with a marginal gain of 19.80 points, or 0.11%, at 17,825.99, while the broad-based NSE Nifty closed at 5,268.40, down 1.65 points, or 0.03%. The Sensex, opened with a positive gap of 177.23 points at 17,983.42 following encouraging global cues in the early deals. Later, the index proceeded to trade in the positive terrain on account of sustained buying activity in frontline stocks. However, the index could not sustain its ground and slipped into the negative. However, it moved up in the positive terrain before the final hour of the closing. Finally, the index closed on a flat note after touching an intraday high of 18,137.28.

On Thursday, BSE Sensex ended the day with a marginal loss of 1.51 points, or 0.01%, at 17,824.48, while the broad-based NSE Nifty closed at 5,285.10, up 16.7 points, or 0.32%.The 30-share benchmark index, Sensex, opened negative at 17,810.52 but soon moved up in the positive for a brief period. However, it again fell into the negative in the early trades due to weak global cues. The index proceeded to trade in the negative on the back of intense selling pressure in frontline stocks amidst volatility. Finally, the index closed on a flat note after touching an intraday low of 17,690.16.

On Friday, the BSE Sensex ended the day with a loss of 245.76 points, or 1.38%, at 17,578.72, while the broad-based NSE Nifty closed at 5,223.50, down 61.6 points, or 0.32%. The indices opened on a negative note at 17,779.54 on the Union Budget day. The 30-share index later fell by 400 points as soon as the Finance Minister P. Chidambaram unveiled the Budget. However, the Sensex recovered smartly before the final one hour of trading backed by Pharma, FMCG, banks and auto stocks. Finally, the BSE barometer wrapped the day on a dull note after touching an intraday low of 17,258.20.

Economy

Pushing for reforms, the Economic Survey stated that inflationary impact of foreign funds flow, a slowdown in the US, an appreciating rupee and sluggish infrastructure sector were major challenges before economy that is projected to slow down to 8.7% in 2007-08.

India`s wholesale price inflation rose 4.89% for the week ended Feb.16, 2008, as against 4.35% for the previous week.

All India Consumer Price Index Number for Industrial Workers (CPI-IW) on base 2001=100 for the month of January 2008 remained stationary at 134. The point to point rate of inflation, during January 2008 based on the CPI-IW on base 2001=100 has remained constant at the previous month`s level of 5.51%.

Budget 2008-09

To give a boost to the agricultural sector, the scheme of Debt Waiver and Debt Relief for farmers has been announced by the Finance Minister, P Chidambaram. All agricultural loans distributed by scheduled commercial banks, regional rural banks and cooperative credit institutions upto Mar. 31, 2007 and overdue as on Dec. 31, 2007 will be covered under Debt Waiver and Debt Relief scheme.

For marginal farmers and small farmers there will be a complete waiver of all loans that were overdue on Dec. 31, 2007 and which remained unpaid until Feb. 29, 2008. In respect of other farmers, there will be a One Time Settlement (OTS) scheme for all loans that were overdue for the above period. Under the OTS, a rebate of 25% will be given against payment of the balance of 75%.

In the General Budget 2008-09, Banking Cash Transaction Tax (BCTT) has been withdrawn w.e.f. Apr. 1, 2009. The step is in view of the fact that the information gathered by means of BCTT is also available to the Income Tax Department through other instruments introduced in the last few years.

Gross Domestic Product (GDP) grew at 8.4% for the third quarter (October- December) 2007-08 as against 8.9% 2007-08 according to the Central Statistical Organization (CSO) at factor cost.

Poll Results - Markets ...


Markets ...

have become boring! Don't track much!

71 (34.5%)

are exciting right now (how ?)!

22 (10.6%)

ripe for long term picks

113 (54.9%)


TOTAL VOTES - 206

NSE Bulk Deal Watch - Feb 29 2008


Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
29-FEB-2008,ADORWELD,Ador Welding Limited,HDFC M F A/C HDFC GROWTH FUND,BUY,416757,177.50,-
29-FEB-2008,CANDC,C & C Constructions Limit,HDFC MUTUAL FUND A/C INFRASTRUCTURE FUND,BUY,200000,210.00,-
29-FEB-2008,INDOCO,Indoco Remedies Limited,RELIANCE ASSET MANAGEMENT PMS,BUY,100000,275.00,-
29-FEB-2008,KALINDEE,Kalindee Rail Nirman (Eng,HDFC MUTUAL FUND A/C HDFC MIDCAP OPPORTUNITIES FUND,BUY,100000,450.00,-
29-FEB-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,3765217,56.77,-
29-FEB-2008,NAGARFERT,Nagarjuna Fert & Chem,P R B SECURITIES PRIVATE LTD,BUY,2287285,56.50,-
29-FEB-2008,NORTHGATE,Northgate Technologies Li,GEOMATRIX - HK LIMITED A/C. MARSHAL ASIA CAPITAL,BUY,600000,542.58,-
29-FEB-2008,PUNJABCHEM,Punj Chem & Crop Prot Ltd,SHREE GOPAL CHEMICALS & TRADING PRIVATE LIMITED,BUY,35000,198.37,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,CPR CAPITAL SERVICES LTD.,BUY,76665,110.99,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,MANSUKH SECURITIES & FINANCE LTD,BUY,79594,109.91,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,R.M. SHARE TRADING PVT LTD,BUY,189338,110.46,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,RUPESH KIRIT DALAL,BUY,64409,109.91,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,SANJAY BHANWARLAL JAIN,BUY,104334,110.10,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,BUY,105420,110.80,-
29-FEB-2008,ADORWELD,Ador Welding Limited,HDFC ASSET MANAGEMENT COMPANT LTD,SELL,416757,177.50,-
29-FEB-2008,CANDC,C & C Constructions Limit,RANJAN GUPTA,SELL,110000,210.56,-
29-FEB-2008,CHAMBLFERT,Chambal Fertilizers Ltd.,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,2100000,64.78,-
29-FEB-2008,INDOCO,Indoco Remedies Limited,SBI MUTUAL FUND,SELL,100000,275.00,-
29-FEB-2008,KALINDEE,Kalindee Rail Nirman (Eng,INDEX EQUITIES PVT.LTD,SELL,98008,450.00,-
29-FEB-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,3765217,56.79,-
29-FEB-2008,NAGARFERT,Nagarjuna Fert & Chem,P R B SECURITIES PRIVATE LTD,SELL,2287285,56.59,-
29-FEB-2008,NIITLTD,NIIT Limited,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,1612000,125.58,-








29-FEB-2008,NORTHGATE,Northgate Technologies Li,TALMA CHEMICAL INDUSTRIES PVT.LTD.,SELL,175000,547.53,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,CPR CAPITAL SERVICES LTD.,SELL,76665,111.14,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,MANSUKH SECURITIES & FINANCE LTD,SELL,79594,110.17,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,R.M. SHARE TRADING PVT LTD,SELL,189338,110.66,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,RUPESH KIRIT DALAL,SELL,64409,110.24,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,SANJAY BHANWARLAL JAIN,SELL,104334,110.26,-
29-FEB-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,SELL,106020,110.84,-

GIPCL, Sarda Energy, HDFC Bank, Maruti Suzuki


GIPCL, Sarda Energy, HDFC Bank, Maruti Suzuki

Eveninger - Feb 29 2008


Eveninger - Feb 29 2008

US Markets slump


Stocks fell sharply Friday after a series of depressing economic and corporate reports and high oil prices stoked concerns about the health of the U.S. economy. The major stock indexes fell more than 2.5 percent and the Dow Jones industrials lost 315 points.

Investors were unnerved by disappointing quarterly results from American International Group Inc. and Dell Inc. And an index of regional business activity that Wall Street regards as a good indicator of a broader report set to arrive next week had its weakest showing in more than six years.

Oil prices continued to stir concern about inflation after pushing past $103 per barrel for the first time.

While stocks made sharp gains in the first three days this week even amid somewhat lackluster economic readings, the litany of concerns investors succumbed to Friday reflected the undercurrent of uncertainty that has kept Wall Street on edge for months.

``We really had to face a plethora of negative news,'' said Art Hogan, chief market strategist at Jefferies & Co. in Boston.

Hogan said while stocks had managed big gains for much of the week, Fridays have been difficult days for Wall Street in the past year or so since cracks began to appear in the credit markets and as concerns have emerged about the economy. Investors worry that unwelcome news might break on the weekends, and that has caused selling pressure in the week's final session.

According to preliminary calculations, the Dow fell 315.79, or 2.51 percent, to 12,266.39. The decline more than erased the week's 200 point gain and sent stocks lower for February, the fourth straight month of declines.

Broader stock indicators also tumbled. The Standard & Poor's 500 index lost 37.05, or 2.71 percent, to 1,330.63, and the Nasdaq composite index declined 60.09, or 2.58 percent, to 2,271.48.

Bond prices rose sharply as stocks lost ground. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.52 percent from 3.67 percent late Thursday.

The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the ``fear index,'' jumped 12.5 percent.

Budget Impact 2008


Finance Minister P Chidambaram presented the federal budget for 2008-09 on Friday, the fifth and final full one of the administration. Here is the impact of the Budget on the following commodities.

Cheap

# Washing Machine


# Air Conditioner


# Motor Cycle 5% discount


# Two wheelers


# Hyundai vehicles Rs 12-14000 less


# Set Top Box


# Dairy Products


# Tea and Coffee


# Live saving drugs


# IT products


# Sport Materials


# Small Car


# Paper and its products


# Rates of 3-4 star hotels


# Packaged coconut water


# Fertiliser


# Puffed rice


# Shampoo


# Hair Oil


# Jewellery


# Water Puriifier


# Naptha


Costly

# Mobile (Nokia Express phone, Samsung)


# Cigarette


# Packaging Software


# On ULIP Service Tax will be charged


# Bulk cement


# Unbranded petrol and diese

India Budget 2008


India Budget 2008






ITC


ITC

Budget Highlights 2008


Budget Highlights 2008

India Retail Sector


India Retail Sector

Union Budget 2008


Union Budget 2008

Grey Market - GSS, Rural, VGuard


Rural Electrification 90 to 105 20 to 22


GSS America InfoTech 400 to 440 Discount


V. Guard Ind. 80 to 85 9 to 10

BSE Bulk Deals to Watch - Feb 28, 29 2008


This data was last updated on Friday, February 29, 2008&nbsp6:24:05 PM
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
29/2/2008 532047 ASIAN FILMS SARFARAZKHAN SARVARKHAN PATHAN S 1352496 0.60
29/2/2008 532903 DHANUSTECH ASHOK COMMERCIAL ENTERPRISES B 100000 233.04
29/2/2008 531314 INTEGRA CAPI SUSHIL KUMAR VOHARA S 72700 4.62
29/2/2008 523062 J J FINANCE SINKI COMMODITIES PVT LTD B 45500 12.26
29/2/2008 523062 J J FINANCE SHYAM SUNDER SADANI S 45500 12.26
29/2/2008 522259 KALIN RAIL N HDFC MUTUAL FUND AC HDFC MIDCAP OPPORTUNITIES FUND B 100000 450.00
29/2/2008 532950 MANJUSHREE N D NISSAR B 276627 48.88
29/2/2008 532950 MANJUSHREE DEEPAK S CHHEDA B 140269 49.00
29/2/2008 532950 MANJUSHREE N D NISSAR S 276627 48.93
29/2/2008 532950 MANJUSHREE DEEPAK S CHHEDA S 140269 49.55
29/2/2008 501477 MULLER & PHI VARUN FINSTOCK PVT. LTD. B 5000 113.50
29/2/2008 501477 MULLER & PHI BHANSALI ASSOCIATES B 5000 113.50
29/2/2008 501477 MULLER & PHI VARUN FINSTOCK PVT. LTD. S 5000 113.50
29/2/2008 501477 MULLER & PHI BHANSALI ASSOCIATES S 5000 113.50
29/2/2008 514328 NACHMO KNITE AMRASHAGUN INVESTMENTS P LTD B 448286 2.15
29/2/2008 514328 NACHMO KNITE VAIKUNTH FINVEST PVT LTD S 228686 2.15
29/2/2008 514328 NACHMO KNITE ARGUS CLOTHING CO. PVT LTD S 221100 2.15
29/2/2008 507813 NAT.OXYGEN RAJIV ARORA B 25146 60.26
29/2/2008 511551 NETWO ST BRO VATICAN COMMERCIAL LTD B 43764 134.27
29/2/2008 530367 NRB BEARING HDFC MIDCAP OPPORTUNITY FUND B 972638 72.24
29/2/2008 530367 NRB BEARING MORGAN STANLEY MAURITIUS CO LTD S 972748 72.20
29/2/2008 526981 SHRI BAJRANG MAHESH MEETAL S 50000 48.30
29/2/2008 522229 TANEJ AERO A CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD B 150000 180.78
29/2/2008 532948 TULSI EXTRU MANSUKH STOCK BROKERS LTD B 96177 110.00
29/2/2008 532948 TULSI EXTRU MANSUKH STOCK BROKERS LTD S 96177 110.00
28/2/2008 531223 ANJANI SYNTH CHIMANLAL MANEKLAL SEC.PVT.LTD B 67075 63.06
28/2/2008 531223 ANJANI SYNTH CHIMANLAL MANEKLAL SEC.PVT.LTD S 62075 63.43
28/2/2008 531137 GEMSTONE INV BHAVESH PRAKASH PABARI B 299161 27.55
28/2/2008 531137 GEMSTONE INV PREM MOHANLAL PARIKH S 201750 27.64
28/2/2008 531137 GEMSTONE INV KISHOR BALUBHAI CHAUHAN S 85912 27.44
28/2/2008 530263 GLOBAL CAP M KUSHAL SOFTWARE LTD B 200000 15.41
28/2/2008 522259 KALIN RAIL N INDEX EQUITIES P.LTD S 100000 468.00
28/2/2008 526015 KEMROC IND E XITIJ INVESTMENTS B 99990 650.10
28/2/2008 526015 KEMROC IND E AMAX NETWORK PVT LTD S 100000 650.10
28/2/2008 532067 KILPEST INDI PREM MOHANLAL PARIKH S 86793 65.15
28/2/2008 511760 KOSIAN INDUS INDERJEET ARYA B 19000 21.76
28/2/2008 532950 MANJUSHREE SHAILESH M. NISSAR B 429835 55.59
28/2/2008 532950 MANJUSHREE PRABHUDAS LILLADHER PVT. LTD. B 660056 54.39
28/2/2008 532950 MANJUSHREE DEEPAK S CHHEDA B 709136 54.10
28/2/2008 532950 MANJUSHREE AMIT M GALA B 427109 54.69
28/2/2008 532950 MANJUSHREE HIMANSHU R NISSAR B 142041 52.95
28/2/2008 532950 MANJUSHREE CHIMANLAL MANEKLAL SEC.PVT.LTD B 744906 52.92
28/2/2008 532950 MANJUSHREE SHAILESH M. NISSAR S 429832 55.82
28/2/2008 532950 MANJUSHREE PRABHUDAS LILLADHER PVT. LTD. S 660056 54.62
28/2/2008 532950 MANJUSHREE DEEPAK S CHHEDA S 709136 54.67
28/2/2008 532950 MANJUSHREE AMIT M GALA S 427109 54.89
28/2/2008 532950 MANJUSHREE HIMANSHU R NISSAR S 142041 53.32
28/2/2008 532950 MANJUSHREE CHIMANLAL MANEKLAL SEC.PVT.LTD S 744906 52.90
28/2/2008 532127 MOBILE TELEC ELECTRA FINANCIAL SERVICES LTD S 100000 9.60
28/2/2008 501477 MULLER & PHI VARUN FINSTOCK PVT LTD B 4000 113.50
28/2/2008 501477 MULLER & PHI BHANSALI ASSOCIATES B 4000 113.50
28/2/2008 501477 MULLER & PHI VARUN FINSTOCK PVT. LTD. S 4000 113.50
28/2/2008 501477 MULLER & PHI BHANSALI ASSOCIATES S 4000 113.50
28/2/2008 532055 RASHEL AGROT ENCA FINLEASE LTD. B 104000 2.61
28/2/2008 532948 TULSI EXTRU HIMANSHU R NISSAR B 102387 114.91
28/2/2008 532948 TULSI EXTRU CHIMANLAL MANEKLAL SEC.PVT.LTD B 137075 115.78
28/2/2008 532948 TULSI EXTRU HIMANSHU R NISSAR S 102387 115.23
28/2/2008 532948 TULSI EXTRU CHIMANLAL MANEKLAL SEC.PVT.LTD S 137075 115.71

Income Tax payers get more exemptions


Income tax payers will feel happier after this Budget. Presenting the Union Budget for 2008-09 in the Lok Sabha, Finance Minister P Chidambaram today raised the basic exemption limit from Rs 1.1 lakh to 1.5 lakh for all male assesses. Also, the limit for women assessees has been hiked from Rs 1.45 lakh to 1.80 lakh and for senior citizens from 1.95 lakh to 2.25 lakh.

The reason: tax collections have been going up in the last few years. And the numbers speak for themselves. The tax to gross domestic product (GDP) has risen from 9.2% in 2003-04 to 12.5% in 2007-08.

The rise in the exemption limit basically implies that a person who was paying a tax of Rs 4,120 annually on his income of Rs 1.5 lakh will not be paying anything at all. Similarly, women assessees would save Rs 6,695 and senior citizens would save Rs 6,180 on income of Rs 1.8 lakh and 2.25 lakh, respectively.

Though this may sound like a small relief, when one goes through the numbers, income earners up to Rs 5 lakh are likely to save between Rs 40,000-45,000. However, the incremental saving over Rs 5 lakh income is just another Rs 5,000. For instance, an individual earning Rs 25 lakh, the savings is Rs 49, 852, Rs 49, 286 and Rs 43,621 for male, female and senior citizen, respectively.

Interestingly, Indian taxpayers will now be better off than those in the US. Says Kaushik Mukerjee, executive director, PricewaterhouseCoopers, "The finance minister has increased the threshold for personal tax exemption by about 35%, which is about $4,000. This is more than the basic threshold in the US where the ceiling is $3,400. However, we are yet to reach the levels of Australia ($5,500), UK ($11,000) or Singapore ($15,000). We were ahead of China already where the annual threshold in China is about $ 1400." Though this hike is substantial in relative terms, Mukherjee feels that it may take some time to catch up with countries like Australia, UK and Singapore.

Many also expected that the education cess of 3% should have also gone, but the FM did not announce any such moves. Also, the surcharge of 10% on the individual income of over Rs 10 lakh stays.

Also, the much-awaited relief on banking transaction tax will now be removed from April, 2009. This tax, 0.1% on transactions of Rs 25,000 on a single day, was introduced in the 2005-06 Budget. This created quite a stir among the consumers who felt that they were being tax again on the same income.

On the whole, the idea of FM seems to be to put more money in the hands of the consumer, which would give them more spending power. Given that there are worries of a slowdown in the two-wheelers and car segment, a little more cash at hand would definitely help consumers.

The new IT slabs, effective from the next fiscal year, would be as follows:

10% on income of Rs. 1.50 lakh to Rs 3 lakh;

20% on income of Rs 3 to Rs 5 lakh; and

30% on income of Rs 5 lakh onwards.

Weekly Close : Good budget?but unhappy traders


All eyes were on budget for the week. Everyone had some expectation with budget and hopes that FM will fulfil their wish. Stock specific action was seen ahead of the years most important event. Markets were choppy and volatile for the whole week..which were also backed by F&O settlement week. Overall volumes were lower as investor remained cautious.

Sensex gained 1.3% for the week. Gains were registered by Bhel +10.26%, Cipla +3.60%, HDFC +9.16%, Hind Liver +5.45%, Hindalco +5.73%, Mah & Mah +10.53%, Ranbaxy +7.79%, Maruti +13.62%. Losses were led by DLC -5.91%, Infosys +3.04%, ICICI Bank +2.12%, TCS +3.39%.

People who expected much more from the budget were dissatisfied by it but overall it was a good budget. Mr. Chidambaram delivered some good aspect as well as some negative aspect from its last Budget in his small stint as an FM. Everybody expected a popular budget as the FM could gain some confidence as the Election nears.

The FM took a big step towards populism as he announced the waiver off farm loans worth Rs. 60000 cr for the small and medium farmers while it also announced 25% rebate through one time settlement scheme for other farmers. Its good news for the farmers specially those who are suffereing. However the ones who have been repaying the loans will feel the pinch and this will set a wrong precedence and bring in indiscipline.

Government estimates that about three crore small and marginal farmers and about one crore other farmers will benefit from the scheme. The total value of overdue loans being waived is estimated at Rs.50,000 crore and the OTS relief on the overdue loans is estimated at Rs.10,000 crore.

The waiver off such large amounts would hit the commercial banks. Quite a bit of this has been written off and may not impact much. Also its not clear on who will take the hit yet. Will the Government pay for this is not clear Largely given that its the Governments plan then they should. What probably would happen is that the Government may compensate them to the extent which has not been written off yet.

On the excise side, the general Central Value Added Tax (Cenvat) rate on all goods has been reduced from 16% to 14% and thats a poitive in terms of lower prices for the economy. Sports goods , exports of gems and jewellery, helicopter simulators, domestic fertiliser production will get customs duty sops so that is positive.

Cut in Excise Duty of Buses & Chassis, Small cars, Two-wheelers and the Three-wheelers from 16% to 12% is a big benefit. Thats a big relief against the high input costs. This is positive for Maruti, Hero Honda, Bajaj Auto and somewhat for Ashok Leyland and Tata Motors. The problem remains for the two wheeler industry is the demand and credit availability. The impetus in the form of lower income tax, higher disposable income could stimulate demand. .

The government will invest around 3300 cr over a period of 3 years to connect rural areas. Positive for Tulip IT, BSNL, Net4India, HCL connect, etc.

Textile companies will see the benefits continuing for TUFs

Cement companies had some negatives in store with higher excise duties. Also they have to face the pressure of new capacities which are expected to come on later this year.

The focus on creating a debt market tradable we believe is a significant step and that will set the ball rolling for lower interest rates.

The big gift awaited tax payers and that was a big cut in income tax rates. Surely we believe that we have not seen the small print yet but certainly it adds significant positives into the hands of investors.

There were a couple of disappointments.

No changes have been made in the corporate income tax rates and also the surcharge and that was a disappointment as everyone was hoping that with collections what they are the Government could have been a bit generous here..

Short-term capital gains tax has been increased from 10% to 15%. Some negative for the capital markets as and also the security Transaction Tax offet for Busines income is disallowed.

The deficits seem quite under control but the 6th pay commission recommendations are not included and nor the 60000 cr bonanza write off for the banks.

All in all a decent budget which cant be called a non event. The FM has "Gambled" that growth will get a kicker with higher disposable income with tax payers and also the Farmers. Its also brownie points ahead of the elections. Does that mean that we can have elections soon. .. ! Well thats something to ponder over the week end !

Markets reacted negatively but the fine print will be known over the weekend. We believe that the budget has delivered more against the expectations which were almost none. There were implict hopes and that was what the markets reacted to as that was not met. Technically: Sensex have turned into a very narrow range for sometime now. 18300 is the major resistance on the upside and 17200 is the major support on the downside.

The global factors will continue to dominate but this budget we believe is one of stimulation and there is good reason for the markets to react positively on their own. Unless there are some big negatives in the fine print expect a positive market starting next week.

Post Market Commentary - Feb 29 2008


The Indian market made a smart recovery towards the final trading hours of the session to pare most of its losses. Tracking the weak global cues, the domestic market opened on a sad note and kept on hovering in the negative territory throughout the trading session. The market tumbled in the mid session as the finance minister announced a hike in short term capital gains tax to 15% from 10% earlier. This led to the negative sentiments in the market. The finance minister kept the corporate tax and the tax on securities transaction tax unchanged. The software stocks fell, as the government did not announce any relief for this sector in terms of export. Auto stocks gained as the government reduced excise duty on small cars to 12% from 16%. Government cut excise duty on hybrid cars to 14%, from 24%. India''s wholesale price index (WPI) rose 4.89 % in the 12 months to 16 February 2008 over the same period last year from the previous week''s rise of 4.35%. From the sectoral front, the metal stocks remained the centre of attraction as most buying was seen from these baskets. The BSE Sensex closed lower by 245.76 at 17,17,578.72 and NSE Nifty fell by 61.6 points to close at 5,223.50. The BSE Mid Cap and Small Cap closed lower by 31.37 points and 40 points at 7,680.39 and 9,628.13 respectively.

The Capital Goods index declined 479.36 points at 16,119.52. Major losers are Suzlon energy (5.67%), Punj Lloyd (4.69%), Crompton Greaves (3.59%), L&T (3.24%) and ABB (2.95%).

The BSE Metal index fell by 232.49 points to close at 16,739.52. Losers are Bhushan Steel (5.45%), Jindal Stainless (3.20%), Tata Steel (2.69%), Nalco (3.04%), Jindal Steel (2.21%).

The BSE Oil & Gas index dropped by 132.71 points at 11,032 as Reliance Inds (3.09%), ONGC (2.58%), BPCL (1.18%), RNRL (0.78%), HPCL (0.70%) and GAIL India (0.67%) closed lower.

The Realty index closed lower by 267.43 points at 9,565.67 as Unitech (4.57%), Akruti City (3.51%), DLF (3.08%), Indbul Real (2.24%), Mahindra Life (1.56%) closed in red.

Sensex clobbered, drops 246 points


The market crumbled after profit taking set in during the early trades and lingered in the negative territory all through the trading session. With the major Asian indices not recovering from their yesterday’s slump further hurt the market sentiment and aggravated selling pressure in the afternoon trades. Weakness in heavyweight, consumer goods, realty and IT stocks dragged the index to the day's low of 17,258, down 566 points from its last close. The Sensex finally signed off the session with losses of 246 points at 17,579. The Nifty dropped 62 points to close at 5,223.

Dragging down the markets, Infosys dropped 3.29% at Rs1,547, Larsen & Toubro tumbled 3.24% at Rs3,523, RIL faltered 3.09% at Rs2,458, DLF slumped 3.08% at Rs781, Tisco shed 2.69% at Rs802, Wipro lost 2.64% at Rs434.65 and ONGC declined 2.58% at Rs1,012.35. However, select blue chip counters managed to clock decent gains. Maruti rose 3.86% at Rs867.20, SBI moved up by 3.48% at Rs2,109.70, Hind Utilities jumped 3.27% at Rs227.35, Bajaj Auto added 2.73% at Rs2,280.15, M&M advanced 1.86% at Rs692.80 and HDFC jumped 1% at Rs2,808.

Except BSE Auto, BSE Bankex, BSE FMCG and BSE HC index, rest of the sectoral indices ended in the red. BSE CG, BSE Realty, BSE IT, BSE Teck, BSE Power and BSE CD index dropped over 2%, while other indices were down around 1% each. However, Auto stocks attracted strong buying support. Ashok LeyLand soared 4.17% at Rs37.45, Maruti advanced 3.86% at Rs867, Bajaj Auto scaled 2.73% at Rs2,280 and Hero Honda, M&M, Amtek, Escorts and TVS Motor gained over 0.5-2% each.

Over 3.58 crore Nagarjuna Fertilisers shares changed hands on the BSE followed by RPL (1.92 crore shares), IFCI (1.72 crore shares), Chambal Fertilisers (1.49 crore shares) and RNRL (1.33 crore shares).

Market may stabilise


The market might stabilise in the coming weeks with the key event viz the Union Budget 2008-2009 over. Rollover of derivative contracts from February 2008 series to March 2008 series was decent. Nifty saw rollover of about 75% and market wide rollover was 72% to 73%, when derivative contracts expired on 28 February 2008.

The Finance Minister P Chidambaram proposed hike the short-term capital gains tax on sale of shares to 15% from 10% in Union Budget 2008-09 which he presented to the parliament on Friday, 29 February 2008. However there was no change in corporate tax and the rate of Securities Transaction Tax (STT), too, was kept unchanged. The finance minister said STT paid by the taxpayer will be treated like any other deductible expenditure against business income.

The general Centvat on all goods has been reduced to 14% from 16%. The peak customs duty was kept unchanged at 10%.

The 30-share BSE Sensex gained 229.65 points or 1.32% to 17,578.72, in the week ended 29 February 2008. The S&P CNX Nifty advanced 112.75 points or 2.20% to 5223.50, in the week.

Sensex is down 3,628.05 points or 17.10% from a record high of 21,206.77 hit on 10 January 2008. The barometer index is down 2708.27 points or 13.34% in calendar 2008 so far.

The wholesale price index rose 4.89% in the 12 months to 16 February 2008, higher than the previous week's rise of 4.35%, government data showed on Friday, 29 February 2008.

Domestic market will also be influenced by global markets. Federal Reserve Chairman Ben Bernanke signaled a readiness to cut interest rates again to prevent further damage to the weak US economy, even as he took note of rising inflation risks last week. Delivering the Fed's semiannual report on the economy to Congress, Bernanke made clear the central bank was worried a deepening housing slump, softening jobs market and tighter credit could dim an already bleak economic outlook.

Higher crude oil prices are also a matter of concern. Crude oil prices touched a record high above $103 a barrel on Friday, 29 February 2008, after Ecuador shut a key export pipeline and a fire hit a major European natural gas plant, while the US dollar's fall to a series of lows kept fresh funds flowing in

Market settles higher in event dominated week


The market posted gains last week amid volatile trade ahead of expiry of February 2008 derivatives contracts. The BSE Sensex posted gains for 3 out of 5 days, whereas the S&P CNX Nifty advanced for 4 out of 5 trading sessions. Small-Cap and Mid-Cap indices underperformed the Sensex.

The Finance Minister P Chidambaram proposed to hike the short term capital gains tax from 10% to 15% in Union Budget 2008-09 which he presented to the parliament on Friday, 29 February 2008. However there was no change in corporate tax and the rate of Securities Transaction Tax (STT), too, was kept unchanged. The finance minister said STT paid by the taxpayer will be treated like any other deductible expenditure against business income.

The general Centvat on all goods has been reduced to 14% from 16%. The peak customs duty was kept unchanged at 10%.

The Finance Minister (FM) announced changes in personal income tax slabs that will bring down tax liability of individual tax payers substantially. With an eye on parliamentary elections in 2009, FM also announced a package of a massive Rs 60000 crore of waivers of loans of farmers.

The 30-share BSE Sensex gained 229.65 points or 1.32% to 17,578.72, in the week ended Friday, 29 February 2008. The S&P CNX Nifty advanced 112.75 points or 2.20% to 5223.50, in the week.

The BSE Mid-Cap index rose 85.94 points or 1.13% to 7,680.39 in the week. The BSE Small-Cap index rose 32.72 points or 0.34% to 9,628.13 in the week. Both these indices underperfomed the Sensex.

Trading for the week started on an upbeat note with 30-share BSE Sensex gaining 301.50 points or 1.74% at 17,650.57 on Monday, 25 February 2008. The broader based S&P CNX Nifty was up 89.95 points or 1.76% at 5,200.70 on that day. Oil & gas and information technology stocks were in demand.

The 30-share BSE Sensex rose 155.62 points or 0.88% at 17,806.19 on Tuesday, 26 February 2008 after Railway Minister Lalu Prasad Yadav provided thrust on modernising rail infrastructure in Railway Budget 2008-09 which he presented to parliament on that day. The broader based S&P CNX Nifty was up 69.35 points or 1.33% at 5,270.05 on that day.

The key benchmark indices came off higher levels in late trade on Wednesday, 27 February 2008, to settle almost flat due to selling in IT and banking counters. The 30-share BSE Sensex rose 19.80 points or 0.11% at 17,825.99. The broader CNX S&P Nifty ended down 1.65 points or 0.03% at 5,268.40 on that day.

On Thursday, 28 February 2008, the barometer index BSE Sensex ended almost unchanged in volatile trade as derivative contracts for February 2008 series expired. The 30-share BSE Sensex ended down 1.51 points or 0.01% at 17,824.48. However, the broader CNX S&P Nifty was up 16.7 points or 0.32% at 5,285.1 on that day.

Market slipped in volatile trade on 29 February 2008 after finance minister announced a hike in short term capital gains tax to 15% from 10%, in Union Budget 2008-09. The 30-share BSE Sensex slipped 245.76 points or 1.38% at 17,578.72. S&P CNX Nifty declined 61.60 points or 1.17% to 5,223.50 on that day.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 1.17% at Rs 2458.25 in the week. The company said on Tuesday, 26 January 2008 it had discovered more gas in an exploration block off India's east coast. This is the company's eight discovery in the block.

Maruti Suzuki surged 13.12% to Rs 867.20 and Tata Motors rose 0.80% to Rs 700.25 in the week. The government reduced excise duty on small cars to 12% from 16% and cut excise duty on hybrid cars to 14%, from 24%, in the Budget.

Farm equipment maker Mahindra & Mahindra advanced 10.18% to Rs 692.80. The Finance Minister proposed higher farm credit target in the Budget.

Banking shares edged lower during the week. ICICI Bank slipped 0.77% to Rs 1090.95 and State Bank of India lost 0.24% to Rs 2109.70

HDFC Bank declined 1.46% to Rs 1453.45 whereas Centurion Bank of Punjab slumped 12.85% to Rs 49.15 in the week. The swap ratio was fixed as 1 share of HDFC Bank for 29 shares of Centurion Bank of Punjab for the proposed merger of Centurion Bank of Punjab with HDFC Bank.

India’s largest cellular services provider in terms of market capitalisation Bharti Airtel fell 2.90% to Rs 825.60 and India's second biggest listed telecommunication services provider by sales Reliance Communications shed 1.25% to Rs 574.55 in the week.

India's second largest power utility firm by revenue Reliance Energy rose 0.76% to Rs 1567.75 in the week. The company said on 25 February 2008 that its board will meet on 5 March 2008 to consider, buy back of equity shares of the company.

NTPC, India's biggest power generation firm by revenue, advanced 1.95% to Rs 201.7 in the week on signing a loan agreement for 68.56 million euros with Nordic Investment Bank to part fund its capital expenditure.

Reliance Power rose 3.30% to Rs 430.60 after its board-approved issue of three bonus shares for every five held, to compensate for the slump in the stock price post listing.

The wholesale price index rose 4.89% in the 12 months to 16 February 2008, higher than the previous week's rise of 4.35%, government data showed on Friday, 29 February 2008.

Nifty saw a rollover of about 75% to March 2008 contracts from February 2008 contracts when February 2008 contracts expired on 28 February 2008. The market wide rollover was 72% to 73%.

Railway Minister Lalu Prasad announced a cut in freight rates by 5% on petrol and diesel in the Railway Budget for 2008/09. Fares for second class sleeper-class passengers were reduced by 5%. Yadav said Railways will invest Rs 75,000 crore to upgrade infrastructure over the next seven years. Indian Railways has a cash surplus of Rs 25000 crore in the 2007/08 financial year, Yadav added.

Crude oil touched a record high above $103 a barrel on Friday, 29 February 2008 after Ecuador shut a key export pipeline and a fire hit a major European natural gas plant, while the US dollar's fall to a series of lows kept fresh funds flowing in.

Sensex sheds 246 points in choppy trade as FM hikes short term capital gains tax


Volatility on the stock market is common on the day of presentation of Union Budget. And it was no exception this time. A strong intra-day rebound was witnessed in mid-afternoon trade today after a steep fall in early afternoon trade. However, the recovery proved short lived as the market failed to sustain higher level in late trade. The market ended with modest losses for the day. 21 out of 30 Sensex stocks declined.

Sensex had tumbled more than 500 points in early afternoon trade soon after the finance minster (FM) P Chidambaram announced a hike in short term capital gains tax on sale of shares to 15% from 10%, in Union Budget 2008-09 which he tabled in parliament today.

Just before the announcement of hike in short term capital gains tax by the finance minster, the market had recovered from lower level after an intial fall triggered by announcement of populist measures in the Budget viz. a major debt waiver package to the farmers. The market had opened in the red and remained subdued in early trade before FM's Budget speech, tracking weak global markets.

The 30-share BSE Sensex declined 245.76 points or 1.38% at 17,578.72. Sensex hit a low of 17,258.20 in afternoon trade. At the day's low, Sensex lost 566.28 points. Sensex hit a high of 17,779.54 in early trade. At the day's high, Sensex lost 44.94 points.

S&P CNX Nifty fell 61.6 points or 1.17% to 5,223.50.

Capital goods and IT stocks fell. Auto stocks rose. The market breadth was weak.

There was no change in corporate tax and the rate of Securities Transaction Tax (STT), too, was kept unchanged, in Union Budget 2008-09. The finance minister said STT paid by the taxpayer will be treated like any other deductible expenditure against business income.

The general Centvat on all goods has been reduced to 14% from 16%. The peak customs duty was kept unchanged at 10%.

The Finance Minister (FM) announced changes in personal income tax slabs that will bring down tax liability of individual tax payers substantially. With an eye on parliamentary elections in 2009, FM also announced a package of a massive Rs 60000 crore of waivers of loans of farmers.

Market breadth was weak: on BSE 1,638 stocks declined as compared to 1,070 stocks that advanced. 42 stocks remained unchanged.

BSE clocked a turnover Rs 6700 crore today 29 February 2008 compared to Rs 5,028.03 crore on Thursday 28 February 2008.

Nifty March 2008 futures were at 5140.10, at a huge discount of 83.40 points as compared to spot closing of 5223.50.

The NSE's futures & options (F&O) segment turnover was Rs 49,083.49 crore, which was lower than Rs 61,065.26 crore on Thursday, 28 February 2008.

India's wholesale price index (WPI) rose 4.89 % in the 12 months to 16 February 2008 over the same period last year, higher than the previous week's rise of 4.35 %, government data showed today.

The BSE Mid-Cap index declined 0.41% to 7,680.39 and BSE Small-Cap index fell 0.41% to 9,628.13. Both these indices outperformed Sensex.

BSE Consumer Durables index (down 2% to 4,699.34 BSE IT index (down 2.65% to 3,862.45), BSE PSU index (down 0.18% to 8,484.16) BSE Power index (down 2.06% to 3,670.94), BSE Capital Goods index (down 2.89% to 16,119.52), BSE Realty index (down 2.72% to 9,565.67) underperformed Sensex.

BSE Oil & Gas index (down 1.19% to 11,032.16), BSE Metal index (down 1.37% to 16,739.52), BSE HealthCare index (up 0.08% to 3,928.78), BSE Auto index (up 1.19% to 4,887.17), BSE Bankex (up 0.4% to 10,113.73), and BSE FMCG index (up 0.91% to 2,274.39) outperformed Sensex.

Capital Goods stocks declined. Larsen & Toubro (down 3.24% to Rs 3,523.05), Bharat Heavy Electricals (down 1.79% to Rs 2,282) and Suzlon Energy (down 5.67% to Rs 281.30) edged lower.

Software stocks fell after after the Finance Minister did not announce any relief for the export-driven sector. Infosys (down 3.29% to Rs 1,546.85), Satyam Computer Services (down 2.83% to Rs 434.15), Wipro (down 2.64% to Rs 434.65) and Tata Consultancy Services (down 0.62% to Rs 874.30) edged lower.

Maruti Suzuki rose 3.86% to Rs 867.20 after government reduced excise duty on small cars to 12% from 16%. Government cut excise duty on hybrid cars to 14%, from 24%. Farm equipment maker Mahindra & Mahindra rose 1.86% to Rs 692.80 after the Finance Minister proposed higher farm credit target.

Bajaj Auto rose 2.73% to Rs 2,280.15 after the Government cut excise duty on two-wheelers to 12%, from 16%.

DLF (down 3.08% to Rs 780.55) and Reliance Industries (down 3.09% to Rs 2,458.25) edged lower from the Sensex pack

All major PSU Banks recovered on television reports the Indian government would reimburse the PSU banks for its Rs 60,000 crore loan waiver for farmers over a period of three years. State Bank of India rose 3.43% to Rs 2,109.70 and Punjab National Bank rose 3.48% to Rs 604.15.

Earlier in the morning the Finance Minister's announcement of a complete waiver of loans for small and marginal farmers with agricultural holding of 1-2 hectors of area, had spooked PSU banking shares with exposure to the rural sector. Meanwhile, Finance Minister has withdrawn Banking Cash Transaction Tax (BCTT) effective from 1 April 2009.

Stocks of the paper manufacturing firms were mixed. The Finance Minister proposed a reduction in excise duty on paper products. J K Paper (down 1.25% to Rs 39.90) and Tamil Nadu Newsprint & papers (down 0.33% to Rs 104.65) edged lower. However, Ballarpur Industries was flat at Rs 136.90 and West Coast Paper rose 0.06% to Rs 80.05. Finance Minister proposed that excise duty will be reduced on paper, paper board and articles made therefrom manufactured out of non-conventional raw materials by units not having an attached bamboo/wood pulp making plant from 12% to 8%.

Ashok Leyland moved up 4.17% to Rs 37.45 after the Finance Minister proposed a reduction in excise duty on buses and their chassis to 12% from 16%, in Union Budget 2008-09.

Sesa Goa spurted 6.69% to Rs 3,464.20 after the finance minister in Union Budget 2008-09 did not increase export duty on iron ore.

Some healthcare stocks gained after government proposed a reduction in excise duty on all pharmaceutical goods to 8%, from 16%. Dishman Pharmaceuticals (up 5.96% to Rs 291.40), Apollo Hospitals (up 1.27% to Rs 495.65), Cadila Healthcare (up 3.02% to Rs 260.80), Fortis Healthcare (up 7.44% to Rs 85.25), Aurobindo Pharma (up 6.37% to Rs 329.75), Cipla (up 0.58% to Rs 207.25), moved up. Ranbaxy Laboratories rose 0.27% to Rs 445.75.

The Finance Minister also proposed a five year tax holiday for setting up hospitals in tier II and tier III regions for providing healthcare in rural areas from 1 April 2008.

Shares of four companies related to power transmission & distribution sector were mixed after the Budget announced plans for a national fund for the segment. Power Grid Corporation of India (down 1.57% to Rs 109.70), Kalpataru Power (down 0.86% to Rs 1244.05) edged lower. However, KEC International (up 0.42% to Rs 728.40) and Jyoti Structures (up 0.86% to Rs 205.75) edged higher. The Finance Minister has proposed Rs 800 crore for accelerated power reforms in FY 2009

Shares of five fertiliser firms slipped between 0.24% to 8.7% after Union Budget 2008-09 did not increase subsidy to producers, as expected. Tata Chemicals (down 0.24% to Rs 329.40), Rashtriya Chemicals and Fertilisers (down 4.73% to Rs 84.60), National Fertilizers (down 4.8% to Rs 66.40), Deepak Fertilisers (down 8.7% to Rs 131.25), and Coromandel Fertilisers and Chemicals (down 4.91% to Rs 127.75), edged lower. The government has announced a loan waiver scheme for small farmers, instead of increasing subsidy to producers.

Stocks of the companies that cater to education sector ended mixed after the Finance Minister said the government aims to provide more thrust to the education sector. Navneet Publications India rose 1.97% to Rs 121.35. However Educomp Solutions (down 2.56% to Rs 4250.85), Camlin (down 4.47% to Rs 234) edged lower. Finance Minister P Chidambaram proposed to set up 16 central universities in 2008-09. He also plans to allot more for education, especially at the primary school level. FM proposed 20% hike in education budget this year from Rs 28,674 crore to Rs 34,400 crore.

Nagarjuna Chemicals & Fertilisers clocked a highest volume of 3.58 crore shares on BSE. Reliance Petroleum (1.92 crore shares), IFCI (1.72 crore shares), Chambal Fertilisers and Chemicals (1.49 crore shares) and Reliance Natural Resources (1.33 crore shares) were other volume toppers in that order.

Reliance Petroleum clocked highest turnover of Rs 328.39 crore on BSE. Relaince Industries (Rs 251.55 crore), OnMobile Global (Rs 247.28 crore), State Bank of India (Rs 246.36 crore) and Essar Oil (Rs 245.63 crore) were other turnover toppers in that order.

FM announced a complete waiver of loans for marginal farmers owning land up to one hectare and small farmers owning land up to 1 and 2 hectares. Agricultural loans given by scheduled commercial banks, regional rural banks and co-operative credit institutions up to March 31, 2007 and due for 31 December 2007 that year will be covered under the waiver scheme to address the problem of indebtedness of farmers.

FM said keeping inflation under check is a cornerstone of government policy. He further said pressure on domestic prices is from food articles and the Government is determined to be self-sufficient in food grains. There is a need to manage capital inflows more actively he added.

The Finance Minister (FM) said India has recorded 8% GDP in 12 consecutive quarters.

Agriculture credit doubled in first 2 years of the UPA government, FM said. Agriculture is expected to grow at 2.6% in FY 2008, he said.

He said capital inflows are excess of economic deficit. Government and Reserve Bank of India will jointly take temporary steps to manage capital inflows, the Finance Minister added.

Indian economy, like all developing economies, is being hurt by these global upheavals in prices. We need to be vigilant and be proactive to change our policies, to counter this global problem, FM said. The rise in global oil prices too has hurt us, say the FM.

The FM plans to allot more for education, especially at the primary school level. FM wants India to be a knowledge society. FM said allocation for Bharat Nirman will be raised to Rs 31,280 crore.