Budget concerns prevailed in Indian stock market during February. Market was more or less volatile.

During second half of

February market showed a little bit of consolidation. Rail Budget was non- event in Indian Market but Union budget was not.
On the budget day sensex gained 175 points, the highest single day gain in February. Except the fuel price hike proposal
budget was pretty decent according to first reviews. Finance Minister later stated that the inflationary impact of budget would
be 0.41 percent. The wholesale price index in India rose 8.56% in January, mainly because of higher food prices. Estimates
show that the figure will go up in the coming months also. Finance Ministers’s announcement regarding disinvestment and
foreign investment were the major factors influenced Indian market on Budget day.
The February closing of sensex was at 16430, up by 0.44 percent against last month closing rate of 16358. Comparing to
January, February was a good month for Indian equities. Market expectations regarding the union budget was less but
Finance Minister surprised the street. His announcements regarding fiscal consolidation and fiscal deficit made everyone
happy. Particularily when he stated that double digit growth rate is achieveable. Positive impact of Budget continues in Indian
stock market during the opening days of March also. Nifty was up by 40 points in February against it's January closing.
Midcap and Smallcap indices underperformed sensex and Nifty. Smallcap stocks were down by 2 percent whereas Midcap
stocks recorded 1.72 percent decrease in February. Selling pressure in these stocks continued in the whole month.
FIIs were in favour of Indian equities, altogether they bought equities worth Rs. 1216.90 Cr. But indian Insurance and Mutual
Fund companies continued selling for the second consecutive month. DIIs sold Rs.309.80 Cr worth equities during February.
Mixed response seen in different sectors. Reality was the most beaten down sector, recorded a decrease of 7.51 percent. Oil
companies and power sector companies were not in the radar of buyers. Both down by 3.54 percent and 3.27 percent
respectively. Public sector companies, also felt the heat of selling pressure,were down by 2.74 percent. All other sectors
barring these four were in the green territory. Consumer durable stocks were hot favourite among traders in February. BSE
CD index was up by 5.34 percent. Buying interest also seen in IT, Health Care and Auto stocks. All these sectors were up by
above 3 percent.
Debt worries in Eurozone countries were another major event during this period. But it failed to make a strong impact in
Indian stocks. Positive trend in Asian Indices influenced Indian stocks too. Government set it's disinvestment target at
Rs.40,000 Cr in FY2011 and has plans to redraw the foreign investment structure. There are Budget proposals to give
banking licence to more public players and NBFCs. All these developments served as positive inputs to Indian stock market.
Going ahead economic consolidation would lead to sustainable growth which will be beneficial for India Inc. Selective
investment will be an intelligent decision now.