Sensex shrugs off S&P rating,indirect tax cut

24 Feb 2009, 1544 hrs IST, ET Bureau

Indian benchmarks ended volatile session flat ahead of February F&O series discounting Standard & Poor’s negative credit rating outlook on India and indirect tax cuts by the government.

The Finance minister Pranab Mukherjee reduced excise duty by two per cent while the general excise duty was reduced 8 per cent from 10 per cent. The rate of service tax was cut from 12 per cent to 10 per cent. Four per cent excise cut announced earlier in the stimulus package in December will continue beyond March 31. Duty on bulk cement was reduced from 10 per cent to 8 per cent.

Standard & Poor's has revised India's sovereign credit rating outlook to negative from stable. At the same time, Standard & Poor's affirmed its 'BBB-' long-term and 'A-3' short-term sovereign credit ratings on India, which are investment grade ratings. The rating agency has justified its stance on the grounds that India's fiscal position has deteriorated to a level that is unsustainable in the medium term.

Bombay Stock Exchange’s Sensex was at 8810.49, down 32.72 points or 0.37 per cent. The 30-share index slipped after touching an intra-day high of 8856.52. It touched an intra-day low of 8619.22.

National Stock Exchange’s Nifty closed at 2733.90, down 2.55 points or 0.20 per cent. The broader index touched a high of 2740.15 and low of 2677.55.

Second rung stocks continued to remain under pressure. BSE Midcap Index was down 1.83 per cent and BSE Smallcap Index slipped 1.38 per cent.

BSE Metal Index was down 2.54 per cent, BSE Bankex was down 1.44 per cent and BSE Capital Goods Index fell 0.62 per cent.

Biggest Sensex gainers were Mahindra & Mahindra (4.96%), Ranbaxy Laboratories (3.85%), Grasim Industries (2.81%), DLF (1.81%) and Reliance Communications (1.55%).

Tata Steel (-5%), HDFC (-4.78%), Sun Pharmaceuticals (-2.21%), Sterlite Industries

(-2.13%) and Wipro (-1.86%) were the losers.

Market breadth on BSE remained negative through the day with 1604 declines against 783 advances.

(All the figures are provisional)
via: E.T