India Market Wrap

Ø INDICES: Sensex -210 at 17466 (-1.19%), NIFTY -63 at 5318 (-1.16%), CNXMIDCAP -89 at 7639 (-1.15%)

Ø SECTORAL PERFORMANCE: BANKEX -1.92%, AUTO 0.22%, CAPITAL GOODS -2.94%, HEALTHCARE -2.02%, Metal -2.22%, OIL & GAS -3.32%, IT -0.58%, FMCG 1.91%, PSU -2.63%, REALTY -1.26%, Consumer Durables -0.54%, POWER -2.98%

Ø MARKET BREADTH: 119 Advances, 377 Declines (BSE 500)

Ø VOLUMES: BSE $0.7bn (32.3%), NSE $3.27bn (34.01%), F&O $42.99bn (74.45%)

Ø TODAY'S GAINERS: ITC 3.47%, MM 3.1%, ACEM 1.97%, HDFC 0.78%, MSIL 0.58%

Ø TODAY'S LOSERS: SUNP -6.94%, CAIR -6.11%, ONGC -4.71%, JSP -4.48%, NTPC -4.04%

MARKET COMMENTARY:

Indian benchmarks plunged a great deal from the high point of the day in early hours of Friday afternoon session as Union Finance Minster continued to divulge the details of Union Budget 2012-13. Just when it looked like the benchmark equity indices would sail beyond the psychological 17,900 (Sensex) and 5,450 (Nifty) levels, sentiments got spooked as Pranab Mukherjee announced hike in Service taxes, raising it to 12% from 10% earlier. Hefty profit booking was evident in Oil & Gas counter which plunged close to two percent while the Consumer Durables and Capital Goods pockets too traded with notable losses. On the other hand, the investors piled up positions in defensive FMCG and Healthcare counters. While the rate sensitive sectors like Realty and Bankex which got pounded in previous session gained some traction. Moreover, the broader markets too traded on flat note. The bourses dived on good volumes while market breadth was in favor of declines.

NEWS ON TODAYS MOVERS:

Ø Infosys closed with minor losses after trading in positive for most part of the day, after the company said it will grow its Product Research and Development Centre in India to accelerate design and development of its offerings, through cutting-edge engineering innovation.

Ø Public sector oil marketing companies rose by 1.47% to 2.88%intraday but later gave away all the gains to close flat, after Finance Minister Pranab Mukherjee in the Union Budget 2012-13 proposed direct cash transfer of subsidy for LPG and kerosene.

Ø SKS Microfinance surged nearly 1.50% to after Finance Minister Pranab Mukherjee in the Union Budget 2012-13 proposed to introduce new laws for micro finance companies.

Ø Organized retail companies traded mixed after, Finance Minister in the Union Budget 2012-13 said efforts are going on to arrive at consensus for 51% foreign direct investment in multibrand retail.

Ø ITC surged nearly 3.47%,after Finance Minister Pranab Mukherjee in the Union Budget 2012-13 reduced basic customs duty on cigarettes.

Ø Public sector banks declined in a sharp fall despite of , Finance Minister Pranab Mukherjee in the Union Budget 2012-13 proposed to provide Rs 15890 crore for recapitalizing public sector banks.

Ø Standard Chartered PLC hit an upper circuit limit of 20% after the Finance Minster Pranab Mukherjee allowed two-way fungibility of Indian Depositary Receipts.

Ø GlaxoSmithKline Pharma surged 1.13% in a weak market on reporting Q4FY12 advance tax number

Ø Coal India traded positive on announcement of full exemption of custom duty on Coal

Ø IDFC gave away all the intraday gains despite of announcement of tax free bonds to be doubled to Rs 60,000 crore

Ø Gold jewellery makers fell by 1.33% to 2.64% after the Finance Minster Pranab Mukherjee proposed to increase basic customs duty on imports of gold and other precious metals.

Ø Four crude oil explorers fell by 3.34% to 5.83% after the Finance Minster Pranab Mukherjee hiked the cess on crude petroleum oil produced in India from Rs 2500 per tonne to Rs 4500 per tonne.

Budget Highlights & Proposals:

Ø current account deficit in fy12 to 3.6% of gdp

Ø estimates fy13 India economic growth at 7.6%

Ø oil subsidy spending likely higher than budgeted

Ø proposes to restrict subsidies to 2% of gdp

Ø will implement direct transfer of fertilizer subsidy

Ø India to take steps to start direct tax code

Ø Goods and services tax network to start in august

Ø India fy12 asset-sales to raise 140 bln rupees

Ø sets India fy13 asset-sale target at 300 bln rupees

Ø India to continue to hold 51% of state-run cos

Ø Fdi in multi-brand retail awaiting consensus

Ø India in talks with states on multi-brand retail fdi

Ø Proposes tax relief for retail investment in equity

Ø Plans tax incentive to boost retail stock investment

Ø India to allow qfi to invest in corp bond markets

Ø To simplify ipo process for wider participation

Ø India plans to allow two-way fungibility of idrs

Ø Will present micro finance bill in budget session

Ø India to give 158.9b rupees capital to banks in fy13

Ø To include irrigation for viability gap funding

Ø Irrigation, dams will be eligible for spl funds

Ø Telecom towers eligible for viability gap funding

Ø Oil, gas pipeline eligible for viability gap funding

Ø Proposes allowing 600 bln rupees of infra bonds

Ø India to allow ecbs to part-finance rupee power debt

Ø India to allow up to $1b ecb for airlines for year

Ø India to be self sufficient in urea in 5 years

Ø Plans 50b rupee India opportunities venture fund

Ø To give 100b rupees to nabard to refinance rrbs

Ø India to set up state-run irrigation company

Ø Raises budget allocation to rural social projects

Ø India to spend 1.93 tln rupees on defense in fy13

Ø India sets fy13 gross tax receipts at 10.8 tln rupees

Ø India fy13 gross taxes at 10.6% of gdp

Ø India met 99% of 11th plan total outlay

Ø India fy13 non-plan expenditure at 9.7 tln rupees

Ø Fy12 budget deficit estimated at 5.9% of gdp

Ø India estimates fy13 budget deficit at 5.1% of gdp

Ø Personal tax exemption limit set at 200,000 rupees

Ø Keeps corporate taxes unchanged

Ø Power, airlines, infra to get tax breaks on ecb

Ø India to cut with-holding tax on ecb for 3 years

Ø India sets fy13 net market borrowing at 4.79 tln rupees

Ø Proposes exemption list for service tax

Ø India budget proposes reduction in securities transaction tax

Ø To exempt some movie services from service tax

Ø Proposes to raise service tax rate to 12% from 10%

Ø India raises excise duty to 12% from 10%

Ø India to raise duty on large cars to as much as 27%

Ø Thermal power cos exempted from customs duty for 2 yr

Ø Proposes to exempt coal, lng from customs duty

Ø Iron-ore machinery parts duty cut to 2.5% vs 7.5%

Ø Automatic textile machinery exempt from customs duty

Ø Proposes to cut customs duty on some medical devises

Ø To exempt duty for setting up solar equipment plant

Ø To increase excise duty on some cigarettes