Foreign Institutional Investors (FIIs) welcome budget

The stock market investors, particularly FIIs, on Friday welcomed the Budget as much for its omissions as for its commissions. An intra-day gain of 420 points and a closing gain of 175 for the Sensex made for a happy picture with lots of green and few reds in the charts, in sharp contrast to the 870-point fall on last year’s Budget day in July.

The Sensex, which was trading with a gain of just 50 points mid-day, saw a “break out” and made accelerated gains after the Budget announcements on personal income-tax relaxation, the issue of bank licences to NBFCs and the fiscal roadmap.  The Sensex and the Nifty had surged more than two per cent at the close of the Finance Minister’s Budget speech. The Sensex soared to a high of 16,669.25 intra-day. Stocks came off their highs later, as many banks and insurance companies booked profits at the high point of the day, an institutional broker said. LIC itself booked profits at several counters, he said. DIIs were net sellers for Rs 859 crore on both BSE and NSE.

Institutional participation in the market was in the opposite directions with FIIs being net buyers for Rs 841 crore; they bought equities worth Rs 1,383 crore this week.

With the fiscal deficit being contained at 5.5 per cent, it will improve international interest, Mr Harjit Singh Sethi, Country Head-Institutional Equity Broking at Almondz Global Securities, said.

Day trading also took its toll with profit booking snowballing towards the end of the day. Retail investors were quick on their toes and sold equities worth Rs 81 crore on the BSE due to the surge they saw after a long gap.

Source:  Thehindubusinessline.