Key benchmark indices trimmed losses in afternoon trade as Finance Minster Arun Jaitley made a number of announcements in his speech while presenting Union Budget 2014-15 in parliament. The barometer index, the S&P BSE Sensex, was down 32.05 points or 0.13%, up about 300 points from the day's low and off close to 200 points from the day's high. The market breadth indicating the overall health of the market was weak.
Shares of companies that run insurance business edged lower after Finance Minister Arun Jaitley in the Union Budget 2014-15 raised foreign direct investment in the insurance sector to 49% from 26%. PSU banks declined after Finance Minister Arun Jaitley in the Union Budget 2014-15 said the government plans to retain majority control in PSU banks. Airline stocks declined after the finance minister announced scheme for development for new airports. Construction stocks declined after the finance minister said that government will allocate Rs 37850 crore for road building plan via National Highway Authority (NHAI).
The Finance Minster said the government is aiming sustained growth of 7-8% in economy in next 3-4 years. Jaitley announced increase in ceiling on foreign investment in the defence and insurance sectors. The finance minister said he accepts target of 4.1% of GDP for fiscal deficit 2014/15 which was set by the previous government in the interim budget. The government is aiming fiscal deficit of 3% in FY 2017. He said the government has to undertake bold steps to spur growth of economy.
Jaitley said the government aims to approve Goods and Services tax by the end of this year. Jaitley said the government will not change rules on retrospective taxation. The government will constitute expenditure management commission, he added.
At 12:30 IST, the S&P BSE Sensex was down 32.05 points or 0.13% to 25,412.76. The index gained 168.91 points at the day's high of 25,613.72 in mid-morning trade. The index shed 327.81 points at the day's low of 25,117 in early afternoon trade, its lowest level since 27 June 2014.
The market breadth indicating the overall health of the market was weak. On BSE, 1,809 shares declined and 885 shares rose. A total of 62 shares were unchanged.
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The BSE Mid-Cap index was down 0.61%. The BSE Small-Cap index was down 0.93%. Both these indices underperformed the Sensex.
Sesa Sterlite (down 2.22%), Bharti Airtel (down 2.23%), and NTPC (down 1.86%) edged lower from the Sensex pack.
Shares of companies that run insurance business edged lower after Finance Minister Arun Jaitley in the Union Budget 2014-15 raised foreign direct investment in the insurance sector to 49% from 26%. State Bank of India (down 2%), Reliance Capital (down 1.66%), ICICI Bank (down 1.3%) and Max India (down 0.86%), and HDFC (down 0.18%), edged lower. Aditya Birla Nuvo (up 0.4%) and Bajaj Finserv (up 0.63%) edged higher.
HDFC owns a controlling stake in HDFC Standard Life Insurance. ICICI Bank holds 73.90% in the ICICI Prudential Life Insurance Company. State Bank of India holds 74% in the SBI Life Insurance Company. Aditya Birla Nuvo owns stake in Birla Sun Life Insurance Company. Reliance Capital holds stake in Reliance General Insurance Company. Bajaj Finserv holds 74% in Bajaj Allianz General Insurance. Max India operates insurance business. Religare Enterprises operates AEGON Religare Life Insurance Company.
PSU banks declined after Finance Minister Arun Jaitley in the Union Budget 2014-15 said the government plans to retain majority control in PSU banks. Canara Bank (down 3.77%), Union Bank of India (down 5.57%), Bank of India (down 4.38%), Bank of Baroda (down 2.14%) and Punjab National Bank (down 2.02%) declined.
Construction stocks declined after the finance minister said that government will allocate Rs 37850 crore for road building plan via National Highway Authority (NHAI). The government will initiate work on selective highways along with corridors. Hindustan Construction Company (down 4.36%), L&T (down 1.73%), IVRCL (down 4.41%), Gammon India (down 3.93%), and IRB Infrastructure & Developers (down 1.77%) declined.
Airline stocks declined after the finance minister announced scheme for development for new airports. Jet Airways (India) (down 1.31%) and SpiceJet (down 0.82%) declined.
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