The benchmark BSE Sensex
on Tuesday posted its biggest single-session fall
in more than seven months due to a sharp decline in index heavyweight ITC.
The index closed at 31,711, down 363.8 points, or 1.13 per cent. This is the Sensex’s biggest fall
since December 2, 2016, when it had declined 1.24 per cent. The Nifty 50 index, too, fell 88.8 points, or 0.90 per cent, to close at 9,827.15. Both the Sensex
and the Nifty had closed at their lifetime highs a day earlier.
Shares of fast-moving consumer goods (FMCG) major ITC, which has the highest weight in the 30-share Sensex, tanked 12.6 per cent — the most since May 12, 1992 — after the government’s decision to hike cess on cigarettes under the goods and services tax (GST) regime.
Another index heavyweight Reliance Industries
(RIL) fell 2 per cent following the government’s notice seeking additional taxes from an oil field.
dragged the Sensex
lower by 368 points, RIL pulled it down by another 55 points. Besides, there were nine other index components that ended with losses.
and Sun Pharmaceutical Industries were among the gainers with an increase of 1.82 per cent and 1.18 per cent, respectively.
“If not for ITC
and RIL, the market
was largely positive. But, still there are chances of a further consolidation in the near term due to stock-specific reactions, as a result of weak first quarter results,” said Vinod Nair, head of research at Geojit Financial Services.
have gained nearly 20 per cent this year on the back of strong investments by foreign institutional investors (FIIs) and mutual funds. ITC
and RIL have contributed to nearly a fourth of the Sensex’s gains this year. Despite Tuesday’s correction, shares of ITC
are still up 18 per cent so far this year.
Most global markets, too, remained subdued on Tuesday and the dollar fell to a 10-month low against a basket of major currencies. The fall
in the greenback was on concerns whether US President Donald Trump would succeed with its pro-growth policy initiative, after his health care Bill fell apart.
“Lacklustre global stocks and lower crude oil prices also played a role in dampening the sentiment. Most Asian stocks were mixed, as continued setbacks for a health care overhaul in the US fuelled emerging doubts over prospects for a range of reforms backed by President Trump,” said Karthikraj Lakshmanan, senior fund manager (equities) at BNP Paribas Mutual Fund.
On Tuesday, FIIs were net buyers share worth of Rs 317 crore, while their domestic counterparts sold shares worth Rs 975 crore, provisional data by the bourses showed.