Business Today

Sensex closes 34 pts up amid fears taxes could go up

The 30-share index, which had lost 227.94 points in the previous session, shot up by 1.2 per cent, that's 218.09 points to 18,216.50 points in the first five minutes of trading. Nifty also rose by 1.1 per cent when it gained 60.30 points to trade at 5,469.00 points.

twitter-logo PTI   Mumbai     Last Updated: August 31, 2010  | 10:31 IST

Stock markets reacted sharply to the Direct Tax Code Bill being tabled in the Lok Sabha on Monday, with the BSE benchmark Sensex paring early gains to close just 34 points higher as investors booked profits amid fears that capital gains tax could be hiked substantially.

After rising by nearly 220 points at the start of the session amid firming global cues, the Sensex closed up by 33.70 points at 18,032.11.

The broad market National Stock Exchange index Nifty also closed 6.75 points higher at 6,516.45, after touching an intra-day high of 5,469.00. During the session, it dipped below 5,400 points at one point of time before recovering.

Analysts said the Bombay Stock Exchange's 30-share index could have fallen even further had it not been cushioned by optimism that GDP growth figures for the first quarter, which are expected to be released on Tuesday, will be strong.

The trading sentiment was also boosted by a firming trend in the Asian region in the wake of a rally on the Dow Jones on Friday after the US Federal Reserve said it would take more unconventional steps to boost growth.

The country's largest steel-maker by sales, Tata Steel, ended 3.49 per cent higher after European arm Corus' deal with Thailand's Sahaviriya Steel Industries to sell its Teesside Cast Products plant in the UK for about USD 500 million.

Furthermore, news that steel companies may hike prices by about Rs 1,000 a tonne on account of a pick-up in demand after the end of the monsoon also generated buying interest.

Other metal stocks like JSW Steel, Hindalco, Jindal Steel and SAIL also attracted good buying support after a smart rise in metal prices on the London Metal Exchange last Friday.

Bharti Airtel, the largest telecom operator in the country, rose by Rs 6.70 to 322.90 and RCom, the second-largest, by Rs 1.30 to Rs 161.85 amid reports that the government plans to change the merger and acquisition rules for new telecommunication operators that are unable to use spectrum allotted to them.

In the Sensex pack, 17 counters finished with gains, while 13 closed with losses. ONGC rose by 2.03 per cent, Hindalco by 1.96 per cent, R-Infra by 1.64 per cent, Jindal Steel by 1.53 per cent, Maruti Suzuki by 1.41 per cent and ICICI Bank by 1.05 per cent.

However, ITC dropped by 1.24 per cent, BHEL by 1.14 per cent, TCS by 1.06 per cent, L&T by 0.75 and RIL by 0.21 per cent.

Amongst the sectoral indices, the BSE-Metal index spurted by 217.62 points, or 1.46 per cent, while the BSE-FMCG declined by 22.43 points or 0.67 per cent, the BSE-IT by 34.41 points or 0.64 per cent and the BSE-CG by 91.22 points or 0.62 per cent. The auto sector index was up by 0.36 per cent at 8,741.49 and the realty sector index by 0.29 per cent at 3,389.65.

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