BSE-NSE brokers disappointed with Union Budget 2007-08

Mumbai, Feb 28 (UNI) Many big bull operators of the country's premier Bombay Stock Exchange (BSE) and first online trading of National Stock Exchange (NSE) were disappointed with the Union Budget 2007-08 due to lack of inflows at higher levels, high valuations, inflation and rising interest rates.

''Fears of an earnings slowdown in coming quarters, and profit taking at higher levels returned to haunt the market'', they said.

''From an all-time high of 14,723.88 struck on 9 February 2007, the BSE Sensex had already tumbled 1,245 points, to 13,478.83 by 27 February 2007, a day before the Budget. The defeat of the Congress in Uttarakhand and Punjab made matters worse,Ғ said to Mr Rajnikant Patel, MD-cum-CEO of BSE.

Mr Patel said the Union Budget was a mixed bag, with defence outlay up Rs 96,000 crore. At the same time, the agriculture sector was the focus of attention.

However, the Sensex crashed by 541 points and industry captains shook their heads in alarm as nothing exciting was offered to the manufacturing or services sectors. In addition, dividend distribution tax, excise hike on cement and MAT levies on technology companies further disturbed marked trends already reeling from the impact of crashing markets in other Asian countries and the US.

The government is obviously troubled by the low agriculture growth of 2.3 per cent over the past few years, lower than the desired 4 per cent. It is also troubled by the increasing suicides by farmers and mounting inflation, which is particularly high with respect to essential commodities like farm produce. These problems coupled with a booming GDP growth rate of 9.2 per cent, meant the government could focus all its attention on weaker sectors.

Meanwhile, NSE MD and CEO Mr Ravi Narain told UNI ''This Budget is disappointing. There are no steps taken to increase productivity in agriculture, electricity and other sectors, which are not performing to their full potential.'' He opined that since revenues from peak customs and excise were increasing, this could have been a time to reduce excise duty to 20 per cent, if not 15 per cent overall, which would have been in line with the Kelkar Committee Report.

UNI