The stock market registered sharp losses, extending recent falling streak, amid global sell-off and as investor sentiment got hit with the introduction of the long term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10% in the Budget 2018 unveiled on 1 February 2018. The barometer index, the S&P BSE Sensex shed 561.22 points or 1.61% at 34,195.94, as per the provisional closing data. The Nifty 50 index slumped 168.30 points or 1.58% at 10,498.25, as per the provisional closing data. The Sensex settled above the 34,000 level after falling below that level in intraday trade.
Key indices opened sharply lower on weak global cues and languished in negative terrain with sharp losses till afternoon trade. Indices trimmed intraday losses in mid-afternoon trade and closed with sharp losses. Global equities tumbled as interest rates in US headed higher amid concerns of returning inflation. The stronger-than-expected US nonfarm jobs report for the month of January released last Friday sent interest rates on sovereign debt jumping.
The Sensex tumbled 1,274.35 points, or 3.66%, at the day's low of 33,482.81 in morning trade. The index fell 236.15 points, or 0.67%, at the day's high of 34,521.01 in mid-afternoon trade. The Nifty tanked 390.25 points, or 3.65%, at the day's low of 10,276.30 in morning trade. The index declined 72.40 points, or 0.67%, at the day's high of 10,594.15 in mid-afternoon trade.
Among secondary indices, the S&P BSE Mid-Cap index provisionally tumbled 1.68%. The S&P BSE Small-Cap index provisionally fell 2.19%. Both these indices underperformed the Sensex.
Overseas, European and Asian stocks tanked following a sharp sell-off on Wall Street. US stocks tumbled yesterday, 5 February 2018 as interest rates headed higher amid concerns of returning inflation.
Back home, the broad market depicted weakness. There were more than four losers against every gainer on BSE. 2,211 shares declined and 543 shares advanced. A total of 147 shares were unchanged.
The total turnover on BSE amounted to Rs 5340.31 crore, compared with the turnover of Rs 4759.65 crore registered during the previous trading session.
All the 19 sectoral indices on the BSE declined, with the IT pack leading the indices. Among IT stocks, HCL Technologies (down 3.46%), Tech Mahindra (down 3.35%), TCS (down 3.16%), Infosys (down 2.25%), Oracle Financial Services Software (down 1.84%) and Wipro (down 0.97%) edged lower.
Tata Motors tumbled 5.31% at Rs 375. The company's consolidated net profit surged 988.6% to Rs 1214.60 crore on 16% growth in net sales to Rs 74156.07 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 5 February 2018.
Tata Motors and Warburg Pincus mutually decide to call off the transaction in Tata Technologies. As per the transaction announced on 15 June 2017, Warburg Pincus was to acquire approximately 43% stake in Tata Technologies from Tata Motors and other Tata entities. However, due to delays in securing regulatory approvals as well as due to the recent performance of the company not meeting internal thresholds because of market challenges, the parties to the transaction have mutually decided not to proceed with closure of the transaction. Tata Motors will continue to explore strategic options to sell its stake in Tata Technologies and remains positive on the outlook of the business.
Lupin tumbled 7.15% to Rs at Rs 791 after consolidated net profit fell 65% to Rs 221.70 crore on 11.3% decline in total revenue from operations to Rs 3975.70 crore in Q3 December 2017 over Q3 December 2016. The result was announced during market hours today, 6 February 2018.
On the macro front, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) will meet today, 6 February and tomorrow, 7 February 2018 for the sixth bi-monthly monetary policy statement for 2017-18. The resolution of the MPC will be announced tomorrow, 7 February 2018. The central bank is likely to keep its policy rate on hold, but could toughen its warnings against inflation. The MPC is expected to tilt towards a hawkish tone from its neutral tone following higher fiscal targets, oil price increases and higher minimum support prices (MSP) for crops.
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