Budget fails to impress, Sensex tanks 210 points | SupportBiz

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Budget fails to impress, Sensex tanks 210 points

Broader markets also ended in the red with the BSE 500 index closing 1.2 percent lower.

Finance Minister Pranab Mukherjee's budget proposals Friday failed to enthuse investors and a benchmark index for Indian equities markets closed nearly 210 points lower.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 17,656.81 points, closed at 17,466.2 points, down 209.65 points or 1.17 percent, from its previous close at 17,675.85 points.

The 50-scrip S&P CNX Nifty of the National Stock Exchange also closed lower at 5,317.9 points, down 1.16 percent from its previous close.

Broader markets also ended in the red with the BSE 500 index closing 1.2 percent lower.

FMCG stocks were the only major gainers, while oil and gas, power and capital goods closed lower.

Among capital market reforms, the finance minister said he would allow foreign investors in Indian corporate debt markets this year, while simplifying the process of subscribing to shares through the initial public offering route.

Assuring further liberalisation of capital markets, he also announced a new equity savings scheme to extend income tax deduction of 50 percent to those who invest up to INR50,000 in equities and whose annual income is less than INR10 lakh.

The finance minister also proposed to reduce the security transaction tax (STT) from the existing 0.125 percent to 0.1 percent

Among major losers in Friday's trade were ONGC, down 5.34 percent at INR271.35; SBI, down 2.88 percent at INR2,233.30; RIL, down 2.73 percent at INR776.25 and L&T, down 2.56 percent at INR1,328.10.

"Provisions like reduction in securities transaction tax, tax exemption under Rajiv Gandhi equity scheme, increase in raising the limit of tax free bonds to Rs.60,000 crore, increase in personal taxation exemption limit are some very welcome steps," said D.K. Aggarwal, chairman and managing director, SMC Investments and Advisors.

Aggarwal said these proposals would leave more disposable income in the hands of investors increase their participation and boost the capital market.

But at the same time an increase in excise duty from 10 to 12 percent and a hike in service tax from 10 percent to 12 percent brought negative sentiments in the markets.

In the last hour of trade, the Sensex fell 249 points to a low of 17,426.58 points. The Nifty too slipped 1.4 percent at 5,305 points.