Mumbai, May 4: The BSE benchmark Sensex today tanked 320 points to close below the crucial 17,000 level for the first time in over 3 months after the government said it is considering a review of the tax treaty with Mauritius that sparked intense selling across sectors.
The government's remarks added to the weak FII sentiment, already dampened by lack of clarity on the issue of General Anti Avoidance Rule (GAAR) and huge depreciation in the rupee.
The 30-share index opened lower in the morning on weak global cues. Soon across-the-board selling emerged, pulling down the key index to below 17,000 level and it finally ended at 16,831.08, a drop of 320 points or nearly 2 per cent. The index was last seen at this level in the last week of January.
Brokers said the Mauritius issue returned to haunt investors after Minister of State for Finance S S Palanimanickam said in the Lok Sabha that the government is considering a review of tax treaty with Mauritius to raise revenues from these foreign investments.
Most FIIs route their investments into Indian stock markets through Mauritius taking advantage of the existing double taxation avoidance treaty.
“The renewed concerns over Mauritius tax treaty spooked market which was already hanging in balance with the GAAR issue, a increasingly weak rupee and negative global cues,” Dipen Shah, Fundamental Research Head, Kotak Securities, said.
In addition, there is nothing much to cheer about in the ongoing results season which otherwise would have supported the markets, said D K Aggarwal, CMD, SMC Investments.
The bearish undertone of the markets have been pronounced in the last three sessions with Sensex losing close to 500 points due to uninspiring FII fund flows, a weak rupee and insipid January-March quarter earnings.
“Overall it's a difficult time and clarity is a must to have a clear vision,” said Aggarwal.
Twelve out of 13 sectoral indices closed with losses between 0.93 per cent and 3.74 per cent. Capital goods, banking, metal PSUs, realty, power and consumer durable counters bore the brunt of hefty selling. BSE-Health Care index gained 0.24 per cent.
Of the 30 Sensex stocks, 25 of were battered with BHEL being the biggest loser at 4.93 per cent, followed by Hero MotoCorp, SBI and L&T—all of them lost over 4 per cent.
Bajaj Auto (3.76 pc), Tata Steel (3.29 pc), Sterlite Industries (3.21 pc) were the other big losers.
DLF, HDFC Bank, ICICI Bank, M&M, Hindalco Industries, Coal India and Jindal Steel lost over 2 per cent.
Pharma major Cipla, which had announced a big reduction in prices of cancer drugs, bucked the overall market trend to end the day with 2.46 per cent. Wipro, HUL, Sun Pharma and Tata Motors too recorded marginal gains.
Amongst Sensex stocks, HDFC Bank was the biggest loser contributor to the index's 320-points loss shedding 35.34 points, followed by L&T (-33.92 pts),ICICI Bank (-32.45 pts), SBI (-31.21 pts) and RIL (-26.64 pts).
The fall in heavyweights like HDFC Bank, L&T, SBI, ICICI Bank, RIL, ITC and Infosys together contributed more than 200 points fall in the 30-share Sensex.
The NSE wide-based Nifty also plunged by 101.55 points or 1.96 per cent to below 5,100-mark at more-than three-month low of 5,086.
Globally, most Asian markets closed with losses as another batch of lacklustre US data stoked concerns over its recovery. Key benchmark indices in Hong Kong, Singapore and South closed with losses while from China and Taiwan finished with gains.
European stocks too were quoting lower in their afternoon deals after European Central Bank held interest rates at one per cent yesterday. The CAC, the DAX and the FTSE were down between 0.68 per cent and 0.79 per cent.
Among the BSE sectoral indices today, the BSE-Capital Goods was the biggest loser (fell by 3.74 pc), followed by BSE-Bankex (3.17 pc), BSE-Metal (2.51 pc), BSE-PSU (2.49 pc), BSE-Realty (2.46 pc), BSE-Power (2.46 pc) and BSE-Consumer Durables (2.05 pc).
The BSE-Auto, BSE-Oil&Gas, BSE-FMCG and BSE-Teck ended the day with losses in the 1-1.8 per cent range.
The overall market breadth continued to remain negative 2,070 stocks ended in the red while 744 that finished in the green. The total turnover improved further to Rs 2,628.94 crore from Rs 1,921.48 crore yesterday.
(FIIs) slowed down their purchases and they pumped in Rs 73.74 crore yesterday as per provisional data with stock exchanges.
The government's remarks added to the weak FII sentiment, already dampened by lack of clarity on the issue of General Anti Avoidance Rule (GAAR) and huge depreciation in the rupee.
The 30-share index opened lower in the morning on weak global cues. Soon across-the-board selling emerged, pulling down the key index to below 17,000 level and it finally ended at 16,831.08, a drop of 320 points or nearly 2 per cent. The index was last seen at this level in the last week of January.
Brokers said the Mauritius issue returned to haunt investors after Minister of State for Finance S S Palanimanickam said in the Lok Sabha that the government is considering a review of tax treaty with Mauritius to raise revenues from these foreign investments.
Most FIIs route their investments into Indian stock markets through Mauritius taking advantage of the existing double taxation avoidance treaty.
“The renewed concerns over Mauritius tax treaty spooked market which was already hanging in balance with the GAAR issue, a increasingly weak rupee and negative global cues,” Dipen Shah, Fundamental Research Head, Kotak Securities, said.
In addition, there is nothing much to cheer about in the ongoing results season which otherwise would have supported the markets, said D K Aggarwal, CMD, SMC Investments.
The bearish undertone of the markets have been pronounced in the last three sessions with Sensex losing close to 500 points due to uninspiring FII fund flows, a weak rupee and insipid January-March quarter earnings.
“Overall it's a difficult time and clarity is a must to have a clear vision,” said Aggarwal.
Twelve out of 13 sectoral indices closed with losses between 0.93 per cent and 3.74 per cent. Capital goods, banking, metal PSUs, realty, power and consumer durable counters bore the brunt of hefty selling. BSE-Health Care index gained 0.24 per cent.
Of the 30 Sensex stocks, 25 of were battered with BHEL being the biggest loser at 4.93 per cent, followed by Hero MotoCorp, SBI and L&T—all of them lost over 4 per cent.
Bajaj Auto (3.76 pc), Tata Steel (3.29 pc), Sterlite Industries (3.21 pc) were the other big losers.
DLF, HDFC Bank, ICICI Bank, M&M, Hindalco Industries, Coal India and Jindal Steel lost over 2 per cent.
Pharma major Cipla, which had announced a big reduction in prices of cancer drugs, bucked the overall market trend to end the day with 2.46 per cent. Wipro, HUL, Sun Pharma and Tata Motors too recorded marginal gains.
Amongst Sensex stocks, HDFC Bank was the biggest loser contributor to the index's 320-points loss shedding 35.34 points, followed by L&T (-33.92 pts),ICICI Bank (-32.45 pts), SBI (-31.21 pts) and RIL (-26.64 pts).
The fall in heavyweights like HDFC Bank, L&T, SBI, ICICI Bank, RIL, ITC and Infosys together contributed more than 200 points fall in the 30-share Sensex.
The NSE wide-based Nifty also plunged by 101.55 points or 1.96 per cent to below 5,100-mark at more-than three-month low of 5,086.
Globally, most Asian markets closed with losses as another batch of lacklustre US data stoked concerns over its recovery. Key benchmark indices in Hong Kong, Singapore and South closed with losses while from China and Taiwan finished with gains.
European stocks too were quoting lower in their afternoon deals after European Central Bank held interest rates at one per cent yesterday. The CAC, the DAX and the FTSE were down between 0.68 per cent and 0.79 per cent.
Among the BSE sectoral indices today, the BSE-Capital Goods was the biggest loser (fell by 3.74 pc), followed by BSE-Bankex (3.17 pc), BSE-Metal (2.51 pc), BSE-PSU (2.49 pc), BSE-Realty (2.46 pc), BSE-Power (2.46 pc) and BSE-Consumer Durables (2.05 pc).
The BSE-Auto, BSE-Oil&Gas, BSE-FMCG and BSE-Teck ended the day with losses in the 1-1.8 per cent range.
The overall market breadth continued to remain negative 2,070 stocks ended in the red while 744 that finished in the green. The total turnover improved further to Rs 2,628.94 crore from Rs 1,921.48 crore yesterday.
(FIIs) slowed down their purchases and they pumped in Rs 73.74 crore yesterday as per provisional data with stock exchanges.
