Taking cues from Wall Street and Asian markets, equities opened on a positive note on the major Indian bourses this morning. But the buoyancy lasted not more than a few minutes as cautious investors chose to play it safe ahead of release of the economic survey.

Despite a rally in late morning trade, the market crashed after the government presented the annual economic survey. By then, Asian markets too had drifted lower with traders trimming down their positions ahead of a slew of reports from the U.S.

The Sensex, which hit a high of 14,764.35 a little past noon but plunged to 14,469.69 soon thereafter, ended the session at 14,658.49, netting a small gain of 13.02 points or 0.09% thanks to some late buying in select blue chip stocks. The Nifty index of the National Stock Exchange closed 7.95 points or 0.18% up at 4348.85. The Nifty touched a high of 4383.65 and a low of 4288.75 today.

The suggestion in the economic survey that called for rationalisation of dividend distribution tax by making dividend taxable in the hands of the shareholders did its bit to drag the market down into the negative territory this afternoon. Weakness in European markets and lower U.S. index futures too played a role in forcing the bulls out of the ring in afternoon trade.

The survey called for a review and phasing out of surcharges, cesses and transaction taxes including commodities transaction tax, securities transaction tax and the fringe benefit tax (FBT). While it expected the economy to grow by around 7% in the year ending March 2010 in the event of a recovery of the U.S. economy, the survey mentioned about the possibility of a GDP growth of 8.5 - 9% in medium term if reforms are pursued.

Meanwhile, India's wholesale price index fell 1.3 per cent in the 12 months to June 20, compared with the previous week's annual decline of 1.14 per cent. The fall was marginally smaller than a median forecast of a 1.35 per cent fall, according to a Reuters poll. The annual inflation rate was 11.91 per cent during the corresponding week of 2008.

Metal stocks rose sharply thanks to a firm trend in global metal prices. PSU stocks had a fairly good outing today. Realty stocks rebounded after early weakness. Select pharma, power and consumer durables stocks posted notable gains.

Capital goods, automobile, telecom and bank stocks were mostly seen struggling today. Information technology and FMCG stocks found support at lower levels. Oil stocks opened on a strong note following a hike in fuel prices but gave up most of their gains due to resistance at higher levels.

ONGC ended stronger by over 7%. Tata Steel moved up by 6.4%. Grasim Industries, Sterlite Industries, DLF, Sun Pharmaceuticals, HDFC, NTPC and Tata Power gained 2% - 4.25%.

Reliance Infrastructure, Hindalco, Wipro and ICICI Bank closed with sharp to moderate gains. ITC and HDFC Bank ended with small gains.

BHEL lost over 3%. Index heavyweight Reliance Industries ended lower by 2.25%. Telecom stocks Bharti Airtel and Reliance Communications lost 2.255 and 1.8% respectively. Tata Motors, Maruti Suzuki, State Bank of India, Hero Honda, Hindustan Unilever, Larsen & Toubro and Tata Consultancy Services also closed on a weak note.

GAIL India ended nearly 8% up. SAIL, Jindal Steel, Power Grid Corporation, Cipla and Reliance Power also closed on a firm note today. Punjab National Bank, Suzlon Energy, Axis Bank, ABB and Tata Communications declined sharply.



Buying was highly stock specific in midcap and smallcap segments. The market breadth was positive at close. Out of 2692 stocks traded on BSE, 1459 stocks closed with gains. 1141 stocks declined and 92 stocks ended flat.