The Telegraph
Since 1st March, 1999
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Market overcomes scare
IT firms shrug off MAT fears

Mumbai, March 1: Led by information technology scrips, which shrugged off apprehensions over the minimum alternate tax (MAT), the sensex today overturned its 540-point loss on budget day to surge ahead by 221.46 points or 1.71 per cent.

Investors perceived that the impact of MAT on infotech companies will not be as harmful as feared initially. “After markets analysed the implications of the proposal, it was felt that large IT companies will not be hurt significantly. This brought buyers back into many of the counters,” a broker said.

Buoyed by the overnight gains in Dow Jones index, the sensex opened in the green today with a gain of 75 points at 13013.74 points.

However, the index struggled to find its feet till noon on alternate bouts of buying and selling and it fell to the day’s low of 12861 during this period on volatile trading.

The buying rush across various counters then catapulted the sensex to 13159.55 at the end, a net rise of 221.46 points or 1.71 per cent over its last close of 12938.09.

Infotech, banking and telecommunication stocks emerged as major gainers. Steel stocks, too, gained on reports of a hike in its prices.

Cement scrips, which were aggressively sold earlier in the day, also reversed part of their losses. Yet, the markets were in no mood to forget the finance minister’s proposal to impose higher excise duty on the commodity.

This resulted in most of the cement shares ending in negative territory. The other major laggards were auto stocks.

Major contributors to the sensex gain were Infosys, TCS, Satyam Computers, Wipro, Reliance Industries and Tata Steel. While Infosys gained 3.61 per cent, TCS was up by 5.65 per cent and Wipro by 5 per cent.

These advances were reflected in the BSE IT index, which gained 201.36 points or 4.13 per cent to close at 5071.35. On the other hand, the BSE Bankex jumped 176.49 points (2.75 per cent).

But there was no relief for cement shares though they erased some of their losses.

Even as Grasim dipped by Rs 57.15 to Rs 2155.45, ACC was down by Rs 23.50 to Rs 876.55 and Gujarat Ambuja Cements Ltd by Rs 4.20 to Rs 111.75.

Notwithstanding today’s rally, apprehensions remain. “What we saw today was a relief rally. The main question is whether this is sustainable. There could be another 2-3 per cent fall from the current levels and thereafter it should stabilise. How the international markets behave will be crucial,” said an analyst with a foreign brokerage.

The S&P CNX Nifty of the NSE recovered by 66.90 points or 1.76 per cent to close at 3811.20 from the previous close of 3745.30. Foreign institutional investors (FIIs) more or less remained on the sidelines. They reported a pullout of Rs 1,932 crore during yesterday’s stock carnage.

Global trend

Asian markets today remained weak. While Hong Kong's Hang Seng ended 305 points down, Japan’s Nikkei closed lower by 150.61 points. Similarly, Singapore’s Straight Times lost 11.57 points, while Taiwanese and Korean markets also finished in the negative territory.

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