Extending its losing streak to the fourth day, the benchmark BSE Sensex declined by 280.16 points on Wednesday, closing at 80,148.88. This drop, amounting to a 0.35% decrease, was driven by profit booking in financial and banking shares following the government's announcement of a hike in securities transaction tax and short-term capital gains tax in the budget for 2024-25.
Market performance
Sensex movement: The 30-share BSE Sensex experienced a significant intraday tumble, plummeting 678.53 points or 0.84% to a low of 79,750.51 before recovering slightly.
NSE Nifty: The broader NSE Nifty also fell, declining by 65.55 points or 0.27% to close at 24,413.50.
Key losers and gainers
- Top losers: Bajaj Finserv led the pack of losers, dropping 2% after its Q1 earnings failed to meet investor expectations. Other major laggards included Bajaj Finance, Hindustan Unilever, Kotak Mahindra Bank, Adani Ports, Axis Bank, and State Bank of India.
- Top gainers: On the other hand, Tech Mahindra, ITC, NTPC, Tata Motors, and Sun Pharma were among the gainers. ITC, in particular, surged to 52-week highs, closing 0.42% higher for the second consecutive day, buoyed by the budget proposal of no new tax on tobacco products.
Analyst insights
- Vinod Nair, Head of Research, Geojit Financial Services: "The budget event has left a mixed bias. The reshuffling of capital gains tax is a short-term negative surprise. Despite this, strong government fiscal and growth policies are attractive to FIIs, which will help stabilise the market. However, a clear recovery will only be evident post the monthly expiry on Thursday."
- Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd: "Profit-taking in banking and automobile stocks led to a fall in key benchmark indices. Although selective buying support helped markets end off their lows, concerns over higher valuations continue to weigh on investor sentiment."
Market trends and global impact
- Q1 results: Analysts noted that the ongoing Q1 results, which have been muted so far, will play a crucial role in determining the near-term market trend. "Nifty fell for a fourth consecutive session on Wednesday, logging its worst streak since May 2024," remarked Deepak Jasani, Head of Retail Research, HDFC Securities.
- Broader market: Despite the overall decline, the BSE smallcap index jumped 1.91% and the midcap index climbed 0.68%.
- Sector performance: Bankex, financial services, and auto were the laggards, while energy, healthcare, industrials, utilities, telecommunication, and power saw gains.
- Global markets: In Asian markets, Seoul, Tokyo, Shanghai, and Hong Kong settled lower. European markets were also trading lower, and the US markets ended marginally down on Tuesday.
Foreign investment and oil prices
- FIIs activity: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,975.31 crore on Tuesday, as per exchange data.
- Oil prices: Global oil benchmark Brent crude jumped 0.75% to USD 81.62 a barrel.
Also read | Budget 2024 | Old or new tax regime: Which will be more beneficial for you? Know here
