The Sensex which crashed by 541 points on Wednesday bounced back by 221 points to close at 13,159.55.

“The capital market will continue to respond to global liquidity flows in the immediate run and to fundamentals in the longer run,” said Krishna Kumar Karwa, MD, Emkay Share and Stock Brokers.

Infotech stocks took a severe beating on the budget day. While Satyam Computers rose 4.24 per cent, Wipro gained 4.16 per cent, TCS added 5 per cent and Infosys gained 3.40 per cent. These stocks had fallen by five to nine per cent on Wednesday after the government extended minimum alternate tax (MAT) to IT companies and brought ESOPs under the fringe benefit tax purview.

According to Vallabh Bansali, chairman, Enam Financial Consultants, the actual impact of tax measures is going to be marginal. “Cement companies will lose from the burden. IT companies already pay 8 to 14 per cent local and foreign income tax, therefore their bottomlines will not be affected by more than 3 to 5 per cent. If things stabilise next year could see roll back and also drop in tax surcharge,” he said.

Banking and capital goods shares also staged a comeback. “There’s no real bad news for India Inc and long term prospects are good,” said BSE dealer Pawan Dharnidharka.

However, the cement sector, continued to fare badly despite reports that producers had raised cement prices. While Gujarat Ambuja Cements dropped 2.37 per cent, Grasim lost 0.60 per cent and ACC shed 2.67 per cent. Cement scrips tumbled after the government announced a differential excise duty structure for the commodity based on retail prices. Cement makers have hiked prices by Rs 12 per 50 kg bag. The excise duty has been raised to Rs 600 per tonne against a retail price of above Rs 190 per bag.

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