The Indian Markets : The last 6 months at a glance
Courtesy Yahoo!
The Indian markets have had a roller-coaster ride over the last 5 months or so. From the early 8,000 levels in March to the mid- 15,000s in mid-June to the early 14,000 s as of today. What a ride! In less than 6 months, we witnessed the euphoria after the election results, the disappointment of the ‘09 budget and the semi-blind mirroring of global cues.
Highlights- UPA’s election victory
The United Progressive Alliance won a near majority in the powerful lower house of the Indian Parliament on 16th May 2009, much to the surprise of pollsters and the business community who had expected a semi-hung parliament. This resulted in a single day jump of 17% in the benchmark index – the Sensex on the very next trading day after the announcement of the results. The Sensex rose to 14,284 from 12,173 in a span of 1 day !
Highlights – India Inc disappointed with ‘09 budget
The union budget was presented by Finance Minister Pranab Mukherjee on July 6th, 2009. Critics were disappointed by the budget as is apparently did not talk of further disinvestment of Public Sector Undertakings, did not outline the roadmap for further economic reforms and ignored the idea of further fiscal stimulus. The Sensex tanked by about 743 points , closing at 14,043 on July 6th, 2009.
I personally liked the budget as it increased the outlay for the flagship NREGA scheme by 144%, abolished the 10% cess on personal income above 10 lakh Rupees p.a , abolished commodity transaction tax as well as the Fringe Benefit tax and marginally raised the standard deductions for personal income tax. I would have been happier had the Finance Minister abolished the Securities Transaction Tax of 0.2% that is paid on every transaction on the stock markets.