Budget boom sets Sensex on fire

The benchmark BSE Sensex index rose 88.15 points or 0.86% to a second-straight record high of 10,370.24.

The Bombay Stock Exchange Sensex on Tuesday zoomed to a new peak of 10,422.65 points, extending its gains to the second straight session on hectic buying support. This was prompted by an overall excellent budget, even as the market ignored a few negatives in it.

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The market recovered losses inflicted by the proposals to increase the Securities Transaction Tax by 25 per cent and the Service Tax by two per cent, and even posted sharp gains after midsession as the industry welcomed the measures to bring in fiscal discipline and cut deficit.

After the initial rally to 10,356.44, the Bombay Stock Exchange (BSE) Benchmark 30-share Index (Sensex) met with a resistance and fell back to the day's low of 10,206.06 as the Union Budget was being presented to Parliament.

The Sensex later bounced back with a vengeance and touched a new record intra-day high of 10,422.65 before ending the day at an all-time closing high of 10,370.24 against Monday's close of 10,282.09, a net rise of 88.15 points or 0.86 per cent.

Terming the Budget as much better than expected, brokers credited the strong price rally to heavy FII inflows coupled with fresh buying support in Cement, Power Equipment, Steel as well as infrastructure sectors.

Foreign Institutional Investors (FIIs) were believed to be heavy buyers in select key stocks. FIIs reported net investments of over Rs 1001 crore on February 24, taking the total inflow during last week to more than Rs 2890 crore.