Sensex rises 97 points to highest this month on excise duty cuts
The benchmark Sensex rose about 97 points to close at its highest level this month, enthused by duty concession for auto, capital goods and consumer non-durable sectors and continued focus on fiscal prudence in the interim budget for 2014-15 presented on Monday.
After rising 173.47 points on Friday, the bluechip index Sensex rose further by 97.24 points, or 0.48 per cent, to end at 20,464.06 -- its highest closing since 20,513.85 on January 31, 2013.
Tata Power, M&M, Dr Reddys Lab and ICICI Bank led the 20 gainers in the 30-share Sensex.
Seven of the twelve BSE sectoral indices rose. Banking, power, auto and healthcare witnessed good demand while realty and metal saw heavy selling. Capital goods narrowed gains on profit-booking while consumer durables ended lower.
The 50-share NSE index Nifty rose by 24.95 points, or 0.41 per cent, to settle at 6,073.30.
"Excise duty cuts have been announced for sectors facing the major brunt of the slowdown...positive for the automotive sector, capital and consumer durables goods. . . spells good news for the manufacturing sector," said Dinesh Thakkar, Chairman & Managing Director, Angel Broking.
Private bank were the among best performers as duty cuts in vehicles could boost lending business, analysts said.
Finance Minister P Chidambaram today said the fiscal deficit for the ongoing financial year will be contained at 4.6 per cent of GDP and current account deficit will be capped at USD 45 billion.
The government also pegged net borrowing for 2014-15 at Rs 4.57 lakh crore, Rs 11,580 crore less than the revised estimates of the FY'14.
Naresh Takkar, MD & CEO, ICRA Ltd said: "The absence of major expenditure announcements ahead of elections and focus on fiscal prudence is reassuring.
The targeted reduction in excise to support the languishing sectors is welcome. . ."
In the broader market, jewellery stocks witnessed a volatile session as the interim Budget made no recommendation for bringing down the import duty on gold.
The uspurge in the domestic market was supported by reports of a firming trend in the Asian region and higher opening in Europe after China's new credit increased to records in January, brokers said.