Markets End on a Modest Note

The markets wiped off a major component of the post-Budget gains as the market participants made sense of the finer print after giving an initial thumbs-up to Pranab Mukherjee's proposals. The Sensex, which had soared by around 600 points in the aftermath of the FM's speech, surrendered more than 400 points from intra-day highs and slipped below the 18k mark to end up a mere 131 points at 17832 and the Nifty ended up 29 points at 5333. The midcap index ended at 6377, higher by 23 points and the small cap index shut shop at 7820, up 30 points. There was a short-covering rally in noon trades, with the event risk and accompanying nervousness behind us. The rally was triggered by lower fiscal deficit target set by the government for the year ended March 2012 despite the subsidy burden accruing from the oil and fertiliser spaces. The finance minister projected a lower fiscal deficit target of 4.6% for the year ended March 2012 as against 5.1% for FY11. However, the benchmark indices shed a major component of their gains in the last hour of trade following selling pressure at higher levels. Whether the budget would change the trajectory of the markets, which have been in a bear grip since the last three months, will be clear in the next few trading sessions.