Taking cues from each line delivered by the finance minister in his budget speech for 2011-12, the benchmark Sensex of the Bombay Stock Exchange remained volatile but stayed in the positive territory throughout.
The index touched an intra-day high of 18,296. before stabilising and closing the day at 17,823.4 with a gain of 122.5 points or 0.7%.
The broader Nifty of the National Stock Exchange closed with a gain of 29.7 points, or 0.6% to 5,333.3, before touching an intra-day high of 5,477.
If the GDP (gross domestic rate) growth rate projections of up to 9.3%, fiscal deficit target of 4.6% and allowing FII investment in mutual funds, higher FII investment in corporate bonds and cut in surcharge for companies from 7.5% to 5% lifted market sentiments and led the Sensex to rise, introduction of ad-valorem into the cement sector, introduction of MAT for SEZs and no significant reform announcement pulled it down.
“The stock market reaction has been positive only because equities had factored in heavy pessimism such as rise in excise duty, service tax rate and a bigger market borrowing figure,” said Amar Ambani, research head, India Infoline.
Experts said that allowing foreign investors to invest in mutual funds after meeting KYC requirements for equity schemes was a big positive.