He stated that the proposals to abolish stamp duty on transfer of debt instruments within the depository mode and reduction of capital gains for resident Indians from 20 per cent to 10 per cent on transfer of shares and securities in line with the rates applicable to NRIs would definitely encourage investments in the capital market.

Full income tax exemption on all incomes from investments in UTI and other mutual funds, Parekh felt, would help restore investors' confidence in the capital markets. He added that the proposal to allow Indian stock exchanges to open trading terminals abroad would facilitate the participation of NRIs in Indian capital markets.

The CSE president welcomed the decision to set up a joint mechanism between Sebi and the Department of Company Affairs fortaking stringent action against "unscrupulous promoters who raise money from investors and misuse them."

Marketmen, who were in a bearish mood prior to the presentation of the Budget, changed gears when they realised that there were no major negatives in the form of additional tax burden on companies except for the surcharge on corporate tax and largely tax neutral changes in indirect taxes.

Among pivotals, ITC witnessed the maximum volatility to set a high and low of Rs 840 and Rs 761 respectively. All other pivotals moved in tandem in view of the improvement in post-Budget sentiment. Some optimists even suggested that the market had bottomed out and the Sensex could over the next couple of sessions rise to 3700 level on the back of a broad-based rally including infotech, pharma and FMCG stocks.