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HindustanTimes Thu,21 Aug 2014
Sensex fizzles after rosy start
HT Correspondent, Hindustan Times
Mumbai, March 16, 2012
First Published: 10:14 IST(16/3/2012)
Last Updated: 01:20 IST(17/3/2012)
Union finance Minister Pranab Mukherjee arrives at Parliament to present the budget 2012-13, in New Delhi. PTI Photo by Shahbaz Khan

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.http://www.hindustantimes.com/Images/Popup/2012/3/17_03_12-metro7b.jpg

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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