RBI, Budget big let down for stock markets

Indian equities markets closed on a quiet note as several key events like the monetary policy and the federal budget failed to enthuse investors.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed on a flat note at 17,466.2 points, down 37.04 points or 0.21 per cent, from its previous weekly close at 17,503.24 points.

The 50-scrip S&P CNX Nifty of the National Stock Exchange also closed lower at 5,317.9 points, 15.65 points or 0.29 per cent down from previous close.

Earlier during the week (March 15), the Reserve Bank of India disappointed the markets as it kept key interest rates unchanged.

Also of concern was the tenor of the language as the apex bank said rate cuts in the future would depend on how soon inflation came down to acceptable levels, and indicated that it was willing to tolerate a lower expansion rate in the gross domestic product.

The Sensex fell 243 points that day.

On Friday, the budget too failed to enthuse investors.

The finance minister did announce some positives for the capital markets.

These included allowing foreign investors in Indian corporate debt markets this year and simplifying process of subscribing to shares through initial public offering route and a new equity savings scheme offering income tax deductions for investments up to Rs 50,000 in stocks.

But at the same time an increase in excise duty from 10 to 12 per cent and a hike in service tax from 10 to 12 per cent brought negative sentiments in the markets.

For the week, broader markets also ended in the red with the BSE 500 index closing 0.26 per cent lower. The BSE midcap index, however, managed to rise 0.5 per cent, but the BSE smallcap index shed 0.66 per cent.

Losers during the week on the 30-scrip Sensex included: DLF, down 5.6 per cent at Rs196.25; Sun Pharma, down 5.2 per cent at Rs 545.05; TCS, down 4.8 per cent at Rs 1,167.50 and HDFC Bank, down 4.7 per cent at Rs 507.70.

Among global bourses, Asian markets closed mixed on a weekly basis.

The Japanese Nikkei rose 2.02 per cent during the week to close at 10,129.38 points, while Hong Kong's Hang Seng moved up 1.1 per cent and ended at 21,317.85 points on Friday.

The Chinese Shanghai Composite index shed 1.42 per cent to end the week at 2,404.74 points.

European markets, however, rose smartly.

Britain's FTSE 100 rose 1.33 per cent to close at 5,965.58 points, while the German DAX shot up 4.03 per cent at 7,157.82 points.

The French CAC 40 gained 3.08 per cent to close at 3,594.83 points.