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The Sensex rose on Monday, with automobile stocks leading the gains after the finance minister proposed excise duty cuts to boost sales hurt by a slowing economy.
The gains were modest, as the interim Budget by P Chidambaram largely stuck to expected lines, delivering on its fiscal deficit commitments by containing expenditure. It lacked any major policy announcements and limited itself to tax sops for some industries. "Other than a few tax cuts, I don't see any major measure on the policy front, which was technically not even expected. The budget was exactly what it was anticipated and there were no surprises. So, investors did not take a larger bet based on that," said Hansal Thacker, director at Lalkar Securities. Defensive stocks like technology and pharma would continue to attract interest, he added.
The Sensex closed 97.24 points, or 0.48 per cent, higher at 20,464.06, while the broader Nifty closed up 24.95 points, or 0.41 per cent, at 6,073.30.
Foreign investors sold Indian shares worth Rs 1,586 lakh on Friday, exchange data showed.
Automobile shares rose after the finance minister proposed excise duty reductions on small cars, two-wheelers, commercial and larger vehicles in the interim budget for 2014-15. Two-wheeler maker Hero MotorCorp gained 1.99 per cent, while utility vehicle maker Mahindra and Mahindra rose 2.83 per cent.
Bank stocks also rose, with HDFC Bank gaining 1.34 per cent, while ICICI Bank was up 2.09 per cent, tracking positive sentiment from the government's planned borrowing and fiscal deficit targets and infusion of $1.8 billion into state-run banks.
Shares of power companies gained, with Tata Power closing 4.87 per cent higher after activist-turned-politician Arvind Kejriwal resigned as chief minister of Delhi on Friday, frustrated by obstacles put in the way of the Jan Lok Pal Bill. Jet Airways ended up 3.26 per cent on expectations Etihad may be forced to make an open offer to retail shareholders after the market regulator served notice to the Abu Dhabi-based airline, a source told Reuters.
Among the decliners, DLF lost 1.69 per cent after its December-quarter net profit lagged estimates when adjusted for Rs 192 crore of tax credit.
