Mumbai: Reacting to Budget proposals, the market went roller coaster and ultimately ended with a sharp fall of 112 points on fairly heavy sell-off by retailers and operators, disappointed over introduction of turnover tax and a hike in excise duty on steel.

In highly volatile market, the BSE Benchmark 30-share Index fluctuated widely in a range of 5004.17 and 4808.63, and ended sharply down at 4843.84 as against yesterday's (Jul 8, 2004) close 4955.97, a net loss of 112.13 points or 2.26 per cent.

The market showed signs of a rally during initial part of Finance Minister P Chidambaram's Budget speech but suddenly crashed by over 196 points from its day's high in a knee-jerk reaction to the proposed 0.15 per cent tax on transaction on securities and four per cent hike in excise duty on steel.

Brokers termed the turnover tax as totally against the interest of retail investors and domestic operators.

Institutional investors including foreign funds were believed to have made good purchases at the lower price levels during the mid-session, aiding the market stabilise for some time. However, stocks failed to sustain the recovery because of continued selling pressure from retailers and operators.

Tisco, SBI, RIL, ONGC, MUL, HPCL, HLL, Grasim, BHEL, Dr Reddy's Lab, MTNL, ICICI Bank, Hero Honda and GACL bore the brunt of selling pressure and finished with sharp falls.

Commending almost all other proposals, particularly increase FDI limit in telecom sector and to give boost to agriculture, Industry and infrastructure, brokers, however said that the new tax would have adverse impact on the bourses, drastically reducing the liquidity in the market.

Foreign Institutional Investors, which have reported net investments of Rs 289 crore in the first four sessions of the month, were buyers in select blue-chip stocks.

However, Automobile, Tractor, Fertiliser and Telecom stocks attracted buying interest on positive Budget proposals. Customs duty on tractors was fully exempted while a number of concessions on excise duty for agriculture have been proposed by the Union Budget. The budget also hiked FDI limit to 74 per cent in Telecom Sector and gave 150 per cent exemption for in-house research and development for Automobile sector.

Shipping stocks also rallied smartly on an option to pay either tonnage tax or corporate tax.

Bharti Tele-Venture, Bajaj Auto, ITC, HDFC, SCI, GESCO, Escorts, Punjab Tractors and Mah & Mah recorded marked gains.