The Sensex and Nifty have made higher highs and higher lows for two days. But that says nothing for now

The market opened in the green this morning and was range-bound till the time finance minister Pranab Mukherjee began his Budget speech. Early announcements about a strong economy and growth of 9% next fiscal, with the focus on bringing down inflation, drove the indices higher. However, a smaller-than-expected hike in the income-tax exemption limit for individuals and nothing heard on the burning issue of crude prices pushed the indices back to the day's lows.

The market gained 550 points to the day's high and the Nifty was up 127 points as the FM concluded his speech. But the gains were short-lived, as profit-booking dragged the indices lower, and they closed around the opening levels.

The Sensex and Nifty closed in the positive today, but this hides the massive intraday volatility. The benchmarks opened with a positive gap at 17,811 and 5,330 respectively. During the budget speech, the Sensex fell to 17,750 while Nifty hit 5,312. After the budget speech was over, the indices climbed to their intra-day highs of 18,297 on the Sensex and 5,477 on the Nifty, and then collapsed again to their intra-day lows, though these were well above the Friday's lows. Finally, the Sensex ended 122 points up at 17,823 and the Nifty was up 30 points at 5,333. The advance-decline ratio on the National Stock Exchange was 934:795.

The market breadth on the key benchmarks was in favour of the gainers. The Sensex settled with 16 gainers and 14 losers, while the Nifty had 27 advancing stocks, 22 declining stocks and one stock remained unchanged. The broader markets also ended on a positive note, but lagged the Sensex. The BSE Mid-cap index gained 0.31% and the BSE Small-cap index rose 0.36%.

In the sectoral space, the BSE Fast Moving Consumer Goods index (up 4.47%) was the top gainer. This was followed by BSE PSU (up 2%) and BSE Realty (up 1.30%). The BSE Healthcare index (down 0.04%) was the lone loser, while the BSE IT ended flat.

The top gainers on the Sensex were ITC (up 8.23%), Mahindra & Mahindra (up 3.19%), Maruti Suzuki (up 3.07%), ONGC (up 2.93%) and Sterlite Industries (up 2.38%). The top losers were Reliance Infrastructure (down 4.46%), Jaiprakash Associates (down 2.88%), Hero Honda (down 2.36%), Tata Motors (down 2.11%) and Tata Power (down 1.79%).

Describing the budget as 'positive' and 'growth-oriented', the Indian industry welcomed the proposals announced by the finance minister. They said the measures to strengthen the farm sector and the move to reduce the fiscal deficit to 4.6% were steps in the right direction. The industry also hailed the move to make the foreign direct investment policy more 'user-friendly'.

Markets in Asia recovered from early losses to settle mostly higher, as the spike in oil prices boosted energy stocks. However, profit-booking kept a tab on the gains. A decline in the value of the yen pushed up Japanese stocks. The South Korean market suffered a deep cut, following threats by North Korea to attack South Korea and the US as the two allies planned joint military drills.

The Shanghai Composite gained 0.93%, the Hang Seng surged 1.42%, the Jakarta Composite rose 0.78%, the KLSE Composite added 0.13% and the Nikkei 225 advanced 0.92%. On the other hand, the Straits Times fell 0.48% and the Seoul Composite declined 1.23%.

Back home, outflows by foreign institutional investors (FIIs) on Friday were offset by domestic institutional investors (DIIs). While FIIs were net sellers of stocks worth Rs561.46 crore, DIIs were net buyers at Rs555.29 crore.

Coal India (up 12.42%) has decided to revise product prices with effect from 25 February 2011. The move would generate additional revenue of around Rs650 crore in 2010-11 and Rs6,200 crore in 2011-12, the company said.

Reliance Industries (RIL) (down 0.10%) is in talks with Japan's Orix Corporation to buy its 23.87% stake in Infrastructure Leasing & Finance Company (IL&FS), one of India's leading infrastructure developers and financiers, for around $1.2 billion. If the deal fructifies, it will make RIL the second largest investor in IL&FS after Life Insurance Corporation of India and will pave the way for its entry into the financial services business.

Sharon Bio-Medicine (up 5%) has signed a memorandum of understanding with Uzpharmsanoat, the state-joint stock concern of the Republic of Uzbekistan for setting up a pharmaceutical plant in Navoi Free Industrial Economic Zone in Uzbekistan. As per the agreement, Sharon Bio-Medicine will provide necessary technology to the new company and make investments along with the Uzbek government in the proposed company.