Key Indian equity index dips to at 28-week low

Mumbai, May 7: The bears appeared to have spooked the Indian share markets on Thursday again, with a key index falling for the third straight day to a six-and-a-half month low, with uncertainties over tax policies, rising coil prices and falling value of the rupee continuing to rock the mood. The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) on Thursday closed 118.26 points, or 0.44 percent, down at 26,599.11 points after opening at at 26,721.34 points. It had touched a high of 26,850.37 points and a low of 26,423.99 points during the day.

The wider 50-scrip Nifty of the tiol Stock Exchange (NSE) also closed in the negative territory - down 39.70 points, or 0.49 percent, at 8,057.30 points.

Data available with the bourses after the closing bell on Thursday showed that the Sensex has now closed at its lowest level since Oct 21, 2014 and the Nifty at its lowest level since Dec 17, 2014. For every stock that gained on Thursday, there were more than two losers.

On Wednesday, the Sensex had crashed 722.77 points, or 2.63 percent, while the Nifty also closed in the red, down 227.80 points or 2.74 percent. Accordingly, both the indexes had ended at their lowest levels since December 17, 2014.

“Weakening of the rupee along with a rebound in crude oil prices has also dampened the sentiments,” said leading brokerage Sharekhan, while adding that dampened sentiments also resulted in the Indian rupee falling to a 20-month low of 64.23 per dollar.

The brokerage attributed the fall in the value of the rupee and the key equity indices to continued selling by foreign funds due to worries over retrospective taxes and delays in the land acquisition bill, which had reduced the allure of local assets for these overseas players.

Alysts said there was persistent selling by foreign institutiol investors, as concerns regarding minimum alterte tax continue to float, with the weakening of the rupee and a re-bound in the global crude oil prices adding to the bearish fuel.

Foreign funds were net sellers of equity worth Rs.1,635.84 crore or $257.04million, as per data with the depositories.

“Market continues its consolidation with continuing foreign funds outflows,” said Vinod ir, head of fundamental research with Geojit BNP Paribas Fincial Services.

“Fourth quarter earnings are impacting market sentiments on this year’s outlook and hence the current consolidation could prevail until the extent of downgrading of this year’s earnings is understood,” ir said.

“Looking at the budget session, the progress in the goods and service tax bill has also not cheered the market yet, as it is eager to know the ultimate outcome on it and the Land bill in the budget session.” In Thursday’s trade, selling pressure was particularly seen in the counters for banking, realty and consumer durables stocks, while some good buying was observed in the IT sector.

“Weakness in global stocks, higher global crude oil prices and data released by the stock exchanges showing heavy selling of Indian stocks by foreign portfolio investors (FPIs) during the previous trading session weighed on investor sentiment,” said HDFC Securities. Of the 12 sector-specific indices of the Mumbai bourse, the one for banking took a hit of 2.33 percent, realty fell by 2.20 percent and consumer durables dropped by 2.01 percent. But the IT index bucked the trend to rise 1.63 percent. (IANS)