Market recovers 127 points after pep talk from government

The stock markets showed signs of stability a day after the huge Budget-day fall, with the benchmark Sensex ending 127 points up amid high volatility and buoyant European cues.

The market showed greater resilience after finance minister Pranab Mukherjee said the government has taken the calculated risk of high fiscal deficit to help stimulate growth and that it was committed to divesting its equity in public sector enterprises.

The Bombay Stock Exchange 30-share barometer fluctuated widely between 14,000.68 and 14,251.88 before settling at 14,170.45, a net recovery of 127.05 points or 0.90 per cent over its previous close.

Analysts said the market is expected to stay range-bound between 14,000 and 15,500 ahead of first-quarter corporate earnings, to be announced shortly.

The broader 50-share Nifty of the National Stock Exchange also gained 36.45 points or 0.88 per cent to close at 4,202.15 from its last close.

India's largest private sector firm Reliance Industries was down 2.02 per cent because of a hike in Minimum Alternate Tax (MAT) to 15 per cent in the Budget.
    
Auto and FMCG shares were in the forefront with their respective indices rising by 3.92 per cent and 3.83 per cent.

ITC gained 6.77 per cent, Jaiprakash Associates 6.65 per cent, Hero Honda 5.80 per cent, Mah & Mah 5.64 per cent, ACC 5.34 per cent, Grasim 5.19 per cent, Maruti Suzuki 4.34 per cent, Bharti Airtel 3.48 per cent and L&T 2.52 per cent.

The lower excise duty in the Budget helped auto stocks to register smart gains while the government's thrust on the agriculture sector benefited the FMCG sector.

The market breadth remained negative with 1,461 losers against 1,071 gainers on the BSE as smallcap shares suffered a setback. Its index closed in the red.