Mumbai, Feb 29: The budget 2008-09 gave mixed signals to markets but the proposal to hike the short-term capital gains tax did not go down well as the benchmark Sensex dipped by more than 240 points on Friday.

The 30-share index on the Bombay Stock Exchange recovered from steep intra-day lows and ended the day at 17,578.72, a fall of 245.76 points, or 1.38 per cent, from its last close.

Marketmen said while the proposed hike in levy on securities held for less than a year poured water on investor sentiments, some other encouraging proposals for sectors like auto, infrastructure, pharma and agriculture was welcomed with cheers.

However, the markets took the proposal to keep corporate and surcharges unchanged with a pinch of salt.

Marketmen said a tardy 8.4 per cent GDP growth for the third quarter of the fiscal, confirming fears of a slowdown expressed in the Economic Survey, also weighed down on the market sentiments.

The Sensex, in a knee-jerk reaction to the budget proposal of a hike in short-term capital gain tax to 15 per cent, had plunged by about 500 points to a low of 17,337.46 in the afternoon trade.

The budget left corporate tax and surcharge unchanged.

Some analysts, however, said the budget continued to be a non-event for stock markets, which will be rather influenced by global trends.

They attributed today`s fall to concerns over soaring crude oil prices and a likely us recession.

The US Federal Reserve reportedly failed to provide any major relief to recession while supporting market expectations for a 50 basis point rate cut in the near future, they pointed out.

Meanwhile, the Indian industry and investment bankers gave a thumbs-up to the union budget, saying Finance Minister P Chidambaram has done a "fantastic" job indirectly for the market.

Kotak Mahindra Bank managing director Uday Kotak said global cues would continue to be the biggest driver for the Indian markets. Domestic inflation and interest rate regime would be the second biggest driver, followed by growth trend of the Indian economy.

The budget tends to impact the markets over a longer term but the sentiment is damaged by the hike in capital gain tax, analysts added.

The National Stock Exchange`s S&P CNX Nifty also fell by 61.60 points or 1.17 per cent to close at 5,223.50 from previous close of 5,285.10.

Heavyweighted stocks such as RIL dipped by 3.09 per cent and L&T by 3.24 per cent while SBI gained 3.48 per cent and Bajaj Auto 2.73 per cent.

The market breadth remained negative with 1,629 losers against 1,068 gainers on the BSE.

The trading volume was shot up to Rs 6,721.65 crore from Rs 5,028.03 crore on Thursday. RPL topped the list of highest traded securities with a turnover of Rs 328.40 crore followed by RIL (Rs 251.56 crore), Onmobile Rs 247.28 crore), SBI (Rs 246.37 crore) and Essar Oil (Rs 245.63 crore).

The broad-based BSE-100 index also ended down at 9,404.98 from previous close of 9,510.92.

The BSE-200 index and the dollex-200 were quoted lower at 2,217.47 and 923.77 at close from 2,240.51 and 935.47 respectively.

The country's economic growth slowed down to 8.4 per cent for the quarter ended December 31, 2007, reflecting the apprehensions expressed in the Economic Survey that GDP expansion would fall below 9 per cent.

The GDP growth during the year-ago quarter had stood at 9.1 per cent, while growth during the full year 2006-07 had touched 9.6 per cent.

The Economic Survey, tabled in Parliament yesterday by Finance Minister P Chidambaram, had said economic expansion would cool to 8.7 per cent in 2007-08 due to sluggishness in consumer durables segment, infrastructure and industrial production.

"The new challenge is to maintain growth at these levels, not to speak of raising it further to double digit levels," the Survey, a report card on the economy, had said.