Market slips into a bottmless pit, Sensex tanks 840 points
, ETMarkets.com|
Updated: Feb 02, 2018, 06.09 PM IST
NEW DELHI: Bulls were left licking their wounds on Friday as the Sensex closed the day with a loss of a massive 840 points -- its single biggest decline in more than three years -- roiled by the re-entry of long-term capital gains tax and worries over the government losing its grip on fiscal deficit.
In absolute terms, the drop is the highest since January 6, 2015.
The 30-share BSE Sensex settled down 840 points, or 2.34 per cent, at 35,067. The NSE Nifty50 plunged 256 points, or 2.33 per cent, at 10,761.
The combined market capitalisation of all companies listed on the BSE tanked by Rs 4.7 lakh crore to Rs 148.4 lakh crore, from just Rs 153.1 lakh crore previously.
Broader midcap and smallcap indices were no better and closed 4 per cent down each.
The bear hug was so tight that most sectoral indices were in the red, with banks, financials and auto stocks feeling the heat.
On the Nifty index, only 5 stocks settled in the green while 45 lost.
"The return of long-term capital gains tax (LTCG) was not entirely unexpected, but may not be seen as a welcome move particularly by high-value investors. There is a fear that this might vitiate the investment environment in the short term," said Aniruddha Chatterjee, Head-Buy-side business for Thomson Reuters, South Asia.
The fiscal deficit target for FY18 was also extended to 3.5 per cent of GDP, from the 3.2 per cent pegged earlier.
Investors were also worried that higher rural spending could create inflationary pressure and force RBI's hand to sit tight on loosening its policy. The review meet is on February 6-7.
Weak global cues further dampened sentiment.
Bajaj Auto settled 5 per cent down after the auto major reported an uninspiring 4 per cent year-on-year rise in consolidated profit for the December quarter. UltraTech Cement, Bajaj Finance and GAIL (India) were other big losers.
On the other hand, IT stocks, including Tech Mahindra, HCL Technologies, Tata Consultancy Services and Infosys, bucked the trend and rose. Market experts believe that the IT industry will benefit from the government's push for newer technologies.
Among the sectors on the NSE, only Nifty IT index closed marginally up by 0.15 per cent. Nifty Realty was the biggest loser, falling over 6 per cent.
In absolute terms, the drop is the highest since January 6, 2015.
The 30-share BSE Sensex settled down 840 points, or 2.34 per cent, at 35,067. The NSE Nifty50 plunged 256 points, or 2.33 per cent, at 10,761.
The combined market capitalisation of all companies listed on the BSE tanked by Rs 4.7 lakh crore to Rs 148.4 lakh crore, from just Rs 153.1 lakh crore previously.
Broader midcap and smallcap indices were no better and closed 4 per cent down each.
The bear hug was so tight that most sectoral indices were in the red, with banks, financials and auto stocks feeling the heat.
On the Nifty index, only 5 stocks settled in the green while 45 lost.
"The return of long-term capital gains tax (LTCG) was not entirely unexpected, but may not be seen as a welcome move particularly by high-value investors. There is a fear that this might vitiate the investment environment in the short term," said Aniruddha Chatterjee, Head-Buy-side business for Thomson Reuters, South Asia.
The fiscal deficit target for FY18 was also extended to 3.5 per cent of GDP, from the 3.2 per cent pegged earlier.
Investors were also worried that higher rural spending could create inflationary pressure and force RBI's hand to sit tight on loosening its policy. The review meet is on February 6-7.
Weak global cues further dampened sentiment.
Bajaj Auto settled 5 per cent down after the auto major reported an uninspiring 4 per cent year-on-year rise in consolidated profit for the December quarter. UltraTech Cement, Bajaj Finance and GAIL (India) were other big losers.
On the other hand, IT stocks, including Tech Mahindra, HCL Technologies, Tata Consultancy Services and Infosys, bucked the trend and rose. Market experts believe that the IT industry will benefit from the government's push for newer technologies.
Among the sectors on the NSE, only Nifty IT index closed marginally up by 0.15 per cent. Nifty Realty was the biggest loser, falling over 6 per cent.
