BUDGET HIGHLIGHTS.

- A big negative for garment manufacturers already battling a rise in cotton prices Automobile Sector

- No change in excise duty; status quo maintained at 10%

- Higher allocation under infrastructure schemes

- Critical parts/assemblies required to manufacture hybrid (green) vehicles granted exemption from basic custom duty of 10% and special CVD

Impact: Positive

- Any increase in excise duty would have directly impacted prices especially in the commercial vehicle segment, thereby resulting in lower demand. The sector is already battling rising raw material costs and any further pressure would have a direct impact on margins.

- Increased expenditure on infrastructure is expected to directly benefit the CV segment.

Real Estate

- Upped priority home loan limit to Rs 25 Lakh Vs Rs 20 Lakh

Impact: Positive

- Welcome policy push for the residential segment of the real estate sector, but the Rs 5 lakh increase is way below the Rs 20 lakh raise that ASSOCHAM has been asking for (at least in the metro cities)

- Good news for housing finance companies as this means access to cheaper funds

Textiles

- 10% excise duty on branded garments

Impact: Negative

- Experts believe that companies will pass on the increased cost burden to the consumers

Banks – Public Sector

- Rs6000 cr to be provided in 2011-12 for maintaining minimum Tier I Capital to Risk Weighted Asset Ratio (CRAR) of 8% in public sector banks

Impact: Positive

- A big positive for PSU banks as this provides a guarantee for their capital base in FY12

Information Technology

- No extension of tax benefits under the Software Technology Parks of India

- Increase in MAT to 18.5%

Impact: Negative

- With STPI benefits expected to lapse in Mar 2011, this move is expected to hurt IT companies who will now have to pay higher taxes from FY12

Transport - Aviation

Service tax raised by Rs50 for domestic travel and Rs250 for international travel by economy class

Impact: Negative

- For a sector constantly battling high ATF prices, this news will not go down well with its customers.

In a nutshell:

Key sectors expected to benefit are: Banking & Financial Services (due to low borrowing programme), Real Estate (due to hike in interest subvention), Cigarettes (due to no increase in taxes) and Automobiles (no increase in Excise). Key losers are Technology (MAT applicable on SEZ), Ports (MAT applicable on SEZ), Iron Ore exporters (hikes in duties).

 Economy - Growth Prospects

 - Economy expected to grow at 9% in 2012, plus or minus 0.25%

 - Inflation seen at a lower level in the financial year 2011-12

 - Exports grown by 9.6%, imports by 17.6% in April-January 2010-11 over corresponding period last year

- In current year, overall economic growth is expected at 8.6%, agriculture growth at 5.4%, industrial growth at 8.1%, and services growth at 9.3%.

     

Taxes – Highlights

Income Tax

- Personal income tax exemption limit raised to Rs1.8 lakh from Rs1.6 lakh for individual tax payers

- For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs2.50 lakh.

- Citizens over 80 years to have exemption limit of Rs 5 lakh.

Direct Tax

- Standard rate of excise duty held at 10%; no change in CENVAT rates

- To reduce surcharge on domestic companies to 5% from 7.5%.

- Direct tax proposals to cause Rs115 bn in revenue loss

- Service tax rate kept at 10 percent%

- Customs and excise proposals to result in net revenue gain of Rs73 bn

- Service tax widened to cover hotel accommodation above Rs1000 per day, A/C restaurants serving liquor, some category of hospitals

- Service tax on air travel increased by Rs50 for domestic travel and Rs250 for international travel in economy class. On higher classes, it will be a flat 10%

- Base rate on excise duty raised to 5% from 4%

- Service-tax proposals are expected to result in a revenue gain of Rs4000 cr.

- Net revenue loss on account of direct taxes will be Rs11500 cr. Net revenue gain on account of indirect taxes will be Rs11300 cr.

- Branded apparel sector to pay mandatory excise duty of 10%

Fiscal Deficit - Projections

- Fiscal deficit seen at 5.1% of GDP in 2010-11

- Fiscal deficit seen at 4.6% of GDP in 2011-12

- Fiscal deficit seen at 3.5% of GDP in 2013-14

Tips for Commodity by considering Budget

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I expected on Monday stock market trade to High.
Hot Stocks Today
Company Price %Change
SBI 2582.65 2.14
Tata Motors 1110.70 5.34
ICICI Bank 986.25 3.67
Tata Steel 606.85 0.70

Domestic markets ended on a positive note on Friday despite witnessing tremendous volatility. The gains were supported by the short covering in the most beaten down stocks in the previous sessions. It seems that the markets were in a mood to consolidate today and wait for the budget day to happen next week.
The 50-share NSE Nifty went up 41 points, to end at 5,303 and the 30-share BSE Sensex climbed just 69 points, to close at 17,701.
Dipan Mehta, Member, BSE and NSE, thinks that as far the budgetary impact is concerned, markets shouldn’t expect any transformational moves from the Finance Minister. “Budget is a non-event, little bit of tinkering will take place here and there,” he adds.
Reacting on the crude oil price hike issue, he said that the crude oil price is a weak point of the domestic markets and it has the potential to pinch and hurt the markets to the maximum level. He says, “If you see crude prices going up another USD 10 from the current hike, you can easily factor in 5-7% decline in our markets and there is nothing in the budget, which will change it.

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RESISTANCE: It has first resistance close to the level of 5430 & above this level the next resistance is seen near the 5510 mark.

SUPPORT: It has first support close to the level of 5175 & below this level the next support is seen near 5090 mark.

FIIs were net sellers of Rs 2,702.22 crore while DIIs were net buyers of Rs 1,029.22 crore in equities today, February 24, as per provisional data available with NSE.
Indian equity benchmarks shattered on the back of a sharp spike in crude oil prices in international markets on Thursday, reacting to growing concerns in Libya, which could spread over to other oil-producing as well as exporting countries in the Middle East.
The 30-share BSE Sensex dropped 545.92 points or 3%, to close at 17,632.41 and the 50-share NSE Nifty 74.65 points or 3.21%, to end at 5262.70 on record volume.
All sectoral indices were butchered badly; the BSE Bank and Capital Goods indices were hit the hardest, which plunged 4% each. Auto, Realty, Metal, Healthcare, Oil & Gas, Power, FMCG and IT indices too were down 2-3.5%.
It was a record volume for the Indian markets, especially on expiry day. Total traded turnover was at Rs 2,99,194.72 crore, including Rs 2,77,277.49 crore from the F&O segment.
FIIs have net sold Rs 906 crore worth of shares in Indian equity markets in the month of February and sold Rs 6330 crore worth of shares in the month of January 2011. stock advanced Tips

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The robust performance of the Indian economy during the ongoing fiscal is likely to prompt the government to peg GDP growth in the 2011-12 fiscal at 9%, as well as withdraw stimulus measures in the forthcoming budget. The Survey, to be tabled by Finance Ministry on Friday, is likely to highlight food inflation and the slow recovery in the euro zone as areas of concern for the domestic economy. Sources said the Survey will also make a strong case for pushing economic reforms, especially raising caps on foreign direct investment (FDI), with a view to achieving a high growth rate on a sustained basis. In her address to Parliament earlier in the week, President had said, "There is no room for complacency... We have to maintain the momentum for reforms on a wide front.

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Bullion : Gold prices have gained almost 1 percent in the last week as geo political concerns in Egypt coupled with worries over inflation supported demand for the yellow metal. Sharp gains in gold were capped on account of dollar strength. Worries in Egypt have intensified as President Hosni Mubarak has refused to step down on an immediate basis. This has raised concern that the worries could have spillover effects in the neighboring countries. On the back of this, we expect gold prices to continue to witness upside. Gold prices gained sharply in the mid of last week, as rise in interest rates by China for the second time in just over six weeks benefited gold’s status as an inflation hedge. But prices managed to rise despite fading safe-haven demand which is indicative from rising US equities and improving US economic data. This is because inflation worries overshadowed the improvement in economic scenario especially after rise in interest rates in China. Holdings in the world’s largest gold backed fund the SPDR Gold Trust continued its downtrend as it fell to 1225.526 tonnes by 10th February, marking their lowest since late January. For this week, Bullion prices will come under pressure on easing concerns in Egypt. Spot gold has a strong support at $1343/$1330 levels and resistance at $1380/$1392 levels. MCX April Gold has a strong support at 20,100/19,900 levels and resistance at 20,640/20,730 levels.

Base Metals : The base metals pack has declined sharply in the last week, lead and zinc fell by 3.4 percent and 3.2 percent on the LME respectively. Dollar strength, geopolitical concerns in Egypt and worries over monetary policy tightening in China put downside pressure. Aluminum production in the US rose 1.3 percent in January as compared to the prior month. Actual production for January 2011 totaled to 151,590 tonnes which is up from 141,688 tonnes in January 2010 and was higher than 149,621 tonnes output in December. Average daily production of aluminium increased to 4,890 tonnes in January as against 4,826 tonnes in December. For this week, base metal prices will get some relief on latest developments in Egypt. Weakness in the dollar on the back of easing concerns in Egypt will also support a rise in metals. MCX February Copper shall find a strong support at 448/442 levels and resistance at 465/ 472 levels for this week.

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hi

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