Despite the Economic Survey calling for sweeping reforms, investors were not enthused as they braced for the budget to see the real action unfold. The Sensex closed little changed at 14,658, up 13 points, in a volatile session, after trading in the narrow zone of 14,764 to 14,469.
On the NSE, the Nifty ended at 4,348, up 8 points. The market will make a decisive move only after the budget, said Pankaj Pandey of ICICI Sec.
Globally, most of the stock markets fell today as investors awaited a crucial US jobs report that is expected to show another rise in unemployment and could give markets renewed direction.
Finance Minister Pranab Mukherjee today tabled the Economic Survey for 2008-09 that prescribes doing away with cess, surcharges on taxes, including Fringe Benefit Tax, and sweeping reforms in areas like petrol pricing and financial sector.
The survey noted that the government should sell a minimum 10 per cent stake in all unlisted public sector enterprises and "auction" those that can't be revived, the Economic Survey said, while recommending a disinvestment target of Rs 25,000 crore annually.
Atsi Sheth, chief economist at Reliance Equities, said that the Economic Survey is a prescriptive document and may not give cues as to what the budget might contain.
The survey noted that to counter the global meltdown the government responded by providing substantial fiscal expansion in the form of tax relief to boost demand and increased expenditure on public assets. This increased the fiscal deficit from 2.7 per cent in 2007-08 to 6.2 per cent of GDP in 2008-09.
“The Budget would be the first key policy statement of the UPA government and it would set the direction of the government on the reform front. The market is expecting a right of centre policy action. But since it has already priced in a lot of positives, it might be disappointed if the budget is not in line with its expectations,” said investment analyst Girish Pai.
Metals, realty and pharma stocks gained in today’s trade. The BSE metal index surged 3.2 per cent led by gains in Tata Steel, Jai Corp and SAIL. The stocks were up more than 3.7 per cent each. The realty index on the BSE rose 1.5 per cent and the BSE pharma index ended 0.8 per cent higher.
Specific oil & gas stocks also advanced after the government announced a hike in fuel prices yesterday. GAIL and ONGC zoomed more than 7 per cent each in today’s trade.
The BSE capital goods index fell 1 per cent and the auto index slipped 0.9 per cent.
Among the Sensex stocks, ONGC was the top gainer. The stock ended at Rs 1,126, up 7 per cent. Tata Steel, Grasim and Sterlite Industries were the other main gainers in the group.
Bhel was the biggest loser in the pack. The stock shed 3 per cent to Rs 2,149. Index heavyweight RIL also fell 2.3 per cent to close at Rs 2,149.