Markets cheers Union Budget 2010. Positive news from the Finance Minister helped the markets rally. Pranab Mukherjee gave positives views on reducing Fiscal deficit and Inflation. Petroleum Minister Murli Deora announced hike in petrol and diesel prices too. Rs.2.67/ltr & Rs.2.58/ltr resp have been increased. Fiscal Deficit will be reduced slowly.
For the Aam Adami Tax slab have been in favour. For income upto Rs 1.60 lakh, there will be no tax while there will be 10% tad for income between Rs 1.60 lakh to Rs 5 lakh; 20% tax for income between Rs 5 lakh to Rs 8 lakh and for income above Rs 8 lakh, there will be tax of 30%.
Global markets corrected for most of the week. Jobless claim in US continue to grow. Analyst claimed that the claim will decline this week, but the outcome was totally different. From the 4.74 lacs in the last week, it has roused to 4.96 lacs. Euro nation continued to face cash cruch. Euro against Rupee have been declining since last few days, which shall have some negative impact on the IT firms which derive most of the revenues from the Euro countries.
Sharp rally in the Banking, Auto and Metals lead the surge in the market. Increase in excise duty by 2% across the board on expected lines. Stocks have already factored in a 2% increase.
Some of the Key highlights of the Budget 2010:
* Increase in excise duty by 2% across the board on expected lines. Stocks have already factored in a 2% increase.
* GST and DTC implementation by April 2011
* MAT increased to 18% vs 15%
* RBI mulling banking license for private & NBFC players.
* Excise on Cigars, Cigarettes to go up.
* Service Tax retained at 10%.
* Surcharge for cos reduced from 10% to 7.5%.
* Excise duty on CFL halved to 4%
* Central Excise duty on LED lights cut to 4%
* Increase Excise duty on all non smoking Tobacco
* Defence spending at Rs 1.47 lakh Cr
* Rs 61000 cr for Rural Infra Development
All together the Budget 2010 was good. Better then the expectation in the market. There were both negatives and positives in the budget. Real Estate stocks crashed in the late hours due to the additional tax levied on the construction.
Rail Budget announced this week also was pretty good. Vision 2020, some of the announcement were as
*Setting up an aggressive target of 1000 km lines next year and 25000 kms in next 10 yrs.
* More money to improve passenger amenities
* 52 long distance express trains
* National high speed rail Authority proposed to plan high speed rail corridor
* Double decker coaches to be introduced in two trains each from
*
Rolls for the month were pretty low. Nifty rollover declined to 68% to March series. The rolls were lower compared to last month. Markets for the most the week remained flat. On back of better than expected Budget markets rallied. Sensex rallied almost 400 points on the last day of the week but closed just 175 points at 16429. Nifty triggered the 5000 points levels but failed to close above the same. Nifty closed up 62 points at 4922. Decisive breakout above the 5015 levels will only take the Nifty to the next level of 5200 levels, till that time markets will remain volatile. Select stock movement will be there.
Based on the Budget 2010 some stocks which looks good are.
SBI, UCO bank, Central Bank of India, Tata Motors, Idfc, Ifci, Rel capital, Rel Power, Adani Power, Moser Baer, XL tele, Educomp, Everon, Suzlon, Opto Circuit, Titan,
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