The tax breather effect

STOCKS REPORT

The market showed its appreciation of the finance minister's pronouncement on transaction tax and jumped up immediately closing up 35.88 points to close at 4993.76. The Sensex went to a high of 5041.19 during the day. The broader Nifty closed up 15.30 points at 1581.40.

There was buying across the board, dealers said. Around 1,000 shares advanced, 760 shares declined, while another 80 were unchanged. Tunover on the BSE was of the order of Rs 1500 crore.

According to the announcement, only delivery-based trades will attract 0.15 per cent transaction tax. Non-delivery based trades will be taxed at 0.015 per cent and this can be set-off against their business income.

Derivatives trades will be taxed at 0.01 per cent. Equity schemes of mutual funds will also get capital gains tax benefits, while debt trades have been exempt from the transaction tax.

With 10 power projects having achieved financial closure, stocks such as Tata Power, Reliance Energy, CESC, and BHEL went up. Marketmen said that there was buying in stocks of public sector companies.

Some refinery and banking stocks exhibited gains. Auto, media and steel stocks were also gainers to a limited extent. There was some amount of buying in tech and telecom stocks.

Tata Steel went up 3.54 per cent to Rs 356. State Bank of India closed up 1.73 per cent at Rs 440.90, Reliance Industries was up 1.42 per cent to Rs 434.75 and ONGC closed up 0.98 per cent to Rs 699.50.

MTNL went up 2.42 per cent to Rs 133.30 and Bharti Tele-Ventures went up 1.19 per cent to Rs 157.15. Maruti Udyog closed up 1.55 per cent at Rs 426.55), Hero Honda Motor was up 1.15 per cent to Rs 441, Bajaj Auto ended up 0.82 per cent to Rs 838.90 all driven by fresh buying.

Among tech stocks Satyam Computer went up 2.45 per cent to Rs 334.20, while Infosys Tech went down 0.73 per cent to Rs 1,437.10 on selling pressure.