Markets on fire post-Budget!

The budget had an interesting outcome this year. The Budget proved a relief rally for most investors, as the government doled out proposals to counter rising inflation, and further economic growth.

• Fiscal deficit numbers (actual as well as projected) are quite heartening.
• There have been no major populist measures.
• There have not been any major reforms announced – GST date is still uncertain and DTC is scheduled for April 2012.
• Implicit in the lower projection of the subsidies is the hope that the prices of petroleum products and fertilizers may be partially decontrolled in the coming year. There is no explicit assurance of the same though.
• Service tax maintained at 10% against the wide expectation of an increase. Excise duties not raised either.
• The implications for various sectors are summarized in the attached document.

The Sensex gained 623 points at 18,446, while the Nifty surged 189 points at 5,522.
For the next fiscal, the government increased the IT exemption limit for individuals from Rs 160,000 to Rs 180,000.

In the broader markets, the Mid-cap and Small-cap indices under-performed the benchmark; the Mid-cap index was up a little less than 3% at 6,536.

Among the sectoral indices, the Auto index held ground for most part of the day today, after last week's dismal performance amidst fears of a hike in excise duty.

However, with the government keeping the excise duty intact, auto stocks rallied, and the index was seen trading at a premium of 5% at 8,666.

Source: http://www.rediff.com/business