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It was just a regular day in office for Girish Jain who runs a brokerage house in the heart of India’s financial district — Nariman Point, Mumbai. Except that at a little before 11 a.m., things began to flutter.
Seating arrangements were quickly re-worked and abrupt calls made to summon colleagues. Within no time, all eyes in the room were on the mounted television set as P. Chidambaram took centre stage to deliver his Budget speech.
The silence was palpable, broken only by sounds of orders punched in the blinking trading terminals or of phones ringing off the hook in a tizzy of rushed orders being placed.
Positive opening
The markets began on a positive note around 11 a.m. and braced themselves for a tumultuous day ahead full of ups and downs through the FM’s speech which finally ended around 12-45 p.m.
At the start of his speech both Sensex and Nifty were hovering in the green at 19,270 and 5,833 levels respectively but turned negative towards the end of the speech signalling only a marginal thumbs down to the Budget.
Drops on excise hike
However, the mood soon turned further sour when the FM went onto mention the hike in excise duties for the automobile industry.
The immediate impact was felt on the auto stocks which took a momentary hit.
“There was nothing to spark or excite the markets so it mostly remained range-bound through the speech with some counters such as IT being positive and banking being negative.
“Overall the market saw huge volatility through the progress of the FMs speech,” said Suresh Parmar, Associate Vice-President Institutional Equity, KJMC Capital Market.
“Usually Budget day sees traders taking positions in Nifty options based on volatility and they put strategies in place to get a positive payoff based on increase in volatility.
“This Budget too saw the same pattern build up as the markets witnessed high volatility through the day,” said Girish Jain.
Generally, during the Budget day, brokerages used to witness a lot of excitements and emotions. “But this time around it was missing clearly and that summed up the lack of investors’ interest in the market,” added Parmar.
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