Sensex, Nifty End Higher After Bumpy Budget-Day Trading

Mumbai: The BSE Sensex and Nifty rode a roller-coaster on Saturday, when the budget for the coming fiscal year was present, and they ended the day higher, on hopes the plan will boost growth and corporate taxes will be cut.

The broader Nifty ended up 0.65 per cent at 8,901.85 points. At one point while Finance Minister Arun Jaitley was speaking, the index was up 1.1 per cent, and later it was down as much as 1 per cent.

The Nifty gained 0.8 per cent in a week marked by budget anticipation, while gaining 1.05 per cent in February, its second consecutive monthly gain.

The benchmark BSE Sensex rose 0.48 per cent to 29,361.50 on Saturday. It was up 0.44 per cent for the week and 0.61 per cent for the month.

Saturday's volatile trading reflected investors' views on parts of Jaitley's remarks.

Indexes rose early during the speech, after the minister painted a bright picture of India's prospects. They fell when he said pace of cutting the country's fiscal deficit would be slowed. Now, the deficit will shrink to 3 per cent of gross domestic product in 2017/18, one year later than expected.

Share-prices climbed again on news he plans to cut the corporate tax to 25 per cent from 30 per cent, over four years, and that there would be a delay in tax-avoidance rules for foreign investors by two years.

SHORT ON REFORM

The budget was short on structural reforms, with the government leaving major welfare schemes untouched and only cutting fuel subsidies thanks to collapsed international oil prices.

"It is not close to the 'visionary document' that people have been talking about," said Nitin Jain, CEO of retail capital markets and global asset management for Edelweiss in Mumbai.

"Though it is a fairly well balance budget, the market expectations were really sky rocketing before this day."

The government's measures on GAAR benefited blue chips, which are heavily owned by foreign institutional investors.

Overseas funds have bought a net $3.87 billion in shares so far this year after $16.11 billion in net purchases last year.

Blue chips lead the gainers. Axis Bank rose 8 per cent while Tata Motors gained 3.2 per cent.

However, among decliners index heavyweight ITC slumped 8.2 per cent after the budget raised excise duty on cigarettes by 15 to 25 per cent.