BSE index slips below 35k-mark; investors lose Rs 5 lakh cr in two trading sessions
Mumbai : With disappointment over the reintroduction of the long-term capital gains (LTCG) still looming over the Indian markets, the key equity indices on Monday slid into the negative territory for the fifth consecutive session following weak global cues and selling pressure.
The barometer 30-scrip Sensitive Index (Sensex) on the BSE closed below the 35,000-level at 34,757.16 points — down 309.59 points or 0.88 per cent from Friday’s close. The index had crashed 839.91 points, or 2.34 per cent, on Friday. The Nifty 50 index fell 94.05 points or 0.87 per cent to close at 10,666.55, its lowest closing level since January 11, 2018 and hovered in a range of 10,702.75-10,586.80.
According to market observers, announcements in the Budget like the LTCG tax and a higher-than-expected fiscal deficit target for 2018-19 continued to dampen investors’ risk-taking appetite. The BSE market breadth was bearish as 1,753 stocks declined as against 1,027 advances. Investors lost Rs 5 lakh crore in just two trading sessions. Post Budget on February 1, the Sensex has plummeted by 1,150 points in two sessions. For the past five trading sessions, the index has lost over 1,650 points.
“Markets corrected further on Monday, however, a slow bounce back from the lows helped to curb the losses. The weakness came on the back of a hit in investor sentiments after the Finance Minister had announced bringing the LTCG tax in Union Budget 2018 and projected a higher-than-expected fiscal deficit of 3.3 per cent for FY19,” Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.
“Weakness in global equity markets further added to the selling pressure in the Indian markets. Major Asian markets closed on a negative note,” he said.
In London, the index of Britain’s top 100 companies stretched its longest losing streak since last November into a fifth day, following a 1.3 per cent fall. The FTSE 100 index tumbled to 7,345, having peaked at almost 7,800 last month. The Dow Jones index of industrial companies in New York, which lost 665 points on Friday, dropped a further 290 points when it opened, down almost 1 per cent to 25,314.
Contrary to the view of market analysts, the government said the downslide of the equity indices was not in reaction to the LTCG tax reimposition announcement but negative global cues. “It is not due to the Budget or the LTCG. Dow Jones has also fallen by over 2 per cent,” Finance Minister Arun Jaitley said.
“It not the effect of LTCG (long-term capital gains)… It is the overall index of equity markets which has changed in the other countries of the world also,” said Finance Secretary Hasmukh Adhia.