Calcutta, June 1: The market showed its disappointment with the Budget by reacting heavily in the post-Budget trading. Experienced brokers said that instead of attracting retail investors it would drive out those who dared to remain in the playing arena.Ajit Day, ex-president of CSE, and one of the few outspoken brokers left in the city, felt that the Budget would immediately drive the market down by around 300 points. The obsession of the policy-makers with widening the tax base had been stretched to "ridiculous" limits by seeking file details of investors entering into transactions valued at over Rs 50,000. "In today's context, this limit is meaningless and can be crossed with a purchase sale of only 100 shares," he observed.
Even the string of provisions announced to woo NRI investment came "too late" and would not yield the desired results as NRIs would want to avoid the secondary market trades on account of procedural hassles, Day said.
Another institutional broker, Ratanlal Agarwala, said theBudget was a disappointment as the demand for withdrawal of service tax had been ignored by the finance minister. "The insistence on furnishing PAN details will fall flat as it will be naive to expect that clients will give PAN details when they are shy of furnishing bank account details. Neither Sebi nor the government understands the psyche of the Indian investor," Agarwala claimed.
Mayank Khemka, research head with a leading broking outfit in the city, feels that the Budget is remarkable for its strong protectionist approach which will "stoke inflationary pressures in the economy as imported goods become costlier." The near term outlook, he adds, is negative for the markets as the FIIs are unnerved by the prospect of higher inflation and a high-cost economy.
The market started on Monday on a firm note, with most pivotals ruling higher than previous trading day's close. Larsen & Toubro was the bright spot on sustained buying interest. It closed strong in the pre-Budget session at Rs 280. Similarly, ACCfirmed up to Rs 1755 before the Budget.The post-Budget session triggered off a selling spree as prices fell across the board as nervousness gripped the market. RIL, ITC, Tisco, ACC and SBI went below Friday's closing levels. Volumes for the day, pre and post-Budget together, touched Rs 1016 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
