Sensex loses 2,164 points since Feb 1, caution to continue ahead of RBI policy
New Delhi : As markets extended losses for the sixth successive session, investors became poorer by nearly Rs 10 lakh crore, with Rs 2.7 lakh crore of wealth being wiped out in Tuesday’s session only amid sell-off in world stocks.
Led by a continuous sell-off, the market capitalisation of BSE-listed companies went down by Rs 9,60,938 crore to Rs 1,43,39,062 crore in three days.
The Sensex slumped 309.59 points, or 0.88 per cent, to end at 34,757.16 in the previous trading session. The index had crashed 839.91 points, or 2.34 per cent, on Friday. The Nifty 50 ended at 10498.25, down 168.30 points or 1.6 per cent from its previous close. The BSE benchmark Sensex slumped 1,274.35 points to hit the day’s low at 33,482.81 on Tuesday. Post the Union Budget on February 1, the 30-share index has plummeted by 2,164.11 points.
“Global sell-off due to spike in global bond yield resulted in a knee-jerk reaction in the domestic market. We are seeing an extended impact in the domestic market post the LTCG and fiscal deficit turmoil. However, towards close, market recouped some losses led by value buying on account of earnings growth expectations,” said Vinod Nair, Head of Research, Geojit Financial Services.
Caution in the market is expected to continue ahead of the Monetary Policy Committee’s decision on interest rates at its sixth and final bi-monthly meeting for 2017-18.
“The RBI is likely to have a hawkish undertone when it details its monetary policy on Wednesday,” dealers said. The central bank is expected to leave rates on hold but could issue stronger warnings about inflation. Investor sentiment has remained sluggish after the government announced in the Budget a proposal to levy 10 per cent long-term capital gains (LTCG) tax on equities and projected a fiscal deficit of 3.5 per cent of GDP for 2017-18.
Finance Secretary Hasmukh Adhia said the decline in the key stock market indices is primarily due to global market meltdown over last few days and not due to the imposition of long-term capital gains. “What happened on February 2 and February 5 was mainly because of global shake up that was happening. Of course there is a ripple effect of whatever happens in the world on Indian stock market. Most of
it is because of the global market otherwise the Sensex and the Nifty would have come down on the first and the second day (of Budget), Adhia said.
