Sensex fizzles after rosy start

  • HT Correspondent, Hindustan Times, Mumbai
  • |
  • Updated: Mar 17, 2012 01:20 IST
  • Union finance

    Union finance Minister Pranab Mukherjee arrives at Parliament to present the budget 2012-13, in New Delhi. PTI Photo by Shahbaz Khan

  • Budget 2012-13

    Meira Kumar, P Chidambaram and LK Advani listen to Pranab Mukherjee present Budget 2012-13.

  • Industrialists

    Industrialists watching Union finance minister Pranab Mukherjee presenting the annual Budget 2012-13, on the screens at CII in New Delhi. PTI Photo by Kamal Singh

  • Union finance

    TV combo grab shows Union finance Minsiter Pranab Mukherjee  presenting General Budget 2012-13, as Speaker Meira Kumar tries to quieten  protesting members  in  Lok Sabha on ...

  • Rahul Gandhi

    TV grab shows  Congress party general secretary Rahul Gandhi  listening to the Budget speech of Union finance minister Pranab Mukherjee  in  Lok Sabha. Agencies

  • Lok Sabha members

    TV grab shows Lok Sabha members listening to the budget speech of finance minister Pranab Mukherjee in New Delhi. Agencies

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    A sniffer dog is used to secure sacks of financial papers related to the budget at the Indian Parliament hours before the Indian budget is ...

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    Workers carry sacks of financial papers related to the budget at the Indian Parliament hours before the Indian budget is presented, in New Delhi. Finance ...

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    Finance minister Pranab Mukherjee poses for the media in parliament prior to presenting the national budget in New Delhi. Government was due to deliver its budget ...

  • General Budget

    FM Pranab Mukherjee presents Budget 2012-13 as Prime Minister Manmohan Singh looks on.

A lack of incentives for attracting private sector capital investment and a fiscal deficit closer to 6% saw the benchmark 30-share Bombay Stock Exchange (BSE) Sensex erase early gains and end down 209 points, or 1.2%, at 17,466 points.

It was a session of dramatic intra-day swings for the Sensex, which gained 195 points in intra-day trade to touch a high of 17,871 before losing steam and touching a low of 17,427 points — a swing of 444 points.

"The initial positive reaction stemmed from certain proposals, such as the measures to encourage retail investment through tax sops but a high fiscal deficit figure, which means that interest rates would continue to remain high, negated the market sentiment," said Nirmal Jain, chairman and managing director, India Infoline.

He also blamed the lack of detailing on attracting private sector capital inflows into the stock market as another reason for the decline in the Sensex. Only two indices — the FMCG index and the auto index which gained 1.8% and 0.2% respectively — ended in the positive zone.

According to auto analysts two percentage point increase in excise duty for passenger vehicles will not have huge ramification, even though only Mahindra & Mahindra scrip traded in the green, up 2.7% at R677, as fears of a hike in diesel passenger vehicles were belied.

"Contrary to expectations there was no additional diesel tax. It was a positive for overall industry and especially Mahindra, a diesel player," said Surjit Arora, analyst, Prabhudas Liladhar 

Adding a note of caution, CJ George, MD, Geojit BNP Paribas Financial Services, said retail investors should avoid short-term trades or intra-day trading.



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