Sensex closes 309 points lower, Nifty below 10,700, on weak Asian markets
BSE Sensex closed lower by 309.59 points at 34,757.16, while the NSE Nifty 50 fell 68.05 points to close at 10,692.55.business Updated: Feb 05, 2018 16:54 IST
Shares fell for a fifth straight session on Monday, with the broader NSE Nifty 50 index hitting its lowest in a month, as Asian shares slumped, while worries remained that the Reserve Bank of India would turn more hawkish at its policy meeting later this week, Reuters reported.
Benchmark BSE Sensex closed lower by 309.59 points, or 0.88%, at 34,757.16, while the NSE Nifty 50 fell 68.05 points, or 0.63%, to 10,692.55.
Losses were led by private bank stocks such as HDFC (-4.06%), Kotak Bank (-2.66%), IndusInd Bank (-2.36%), and Yes Bank (-1.69%). Bharti Airtel, on the other hand, led the gains on the back of an investment announcement from Singapore-based Singtel, followed by Tata Motors (3.12%) ahead of its Q3 earnings announcement. PowerGrid (2.08%), ITC(1.43%) and Sun Pharma(1.08%) also closed in the green.
Investors remained concerned that the government widened its fiscal deficit target for the year starting in April to help finance higher spending in rural sectors and healthcare. The government also imposed a 10% LTCG tax for equity investments of more than one year. Investors will also keep an eye on the Reserve Bank of India’s interest rate decision on February 7.
Meanwhile, to soothe investors’ nerves, the government said that the sell off in local stocks has been triggered by weak global cues and not by the long term capital gains tax imposed from February 1 onwards.
It also said that the LTCG tax was needed as t exempting such income from tax was inherently biased against manufacturing and encouraged diversion of investment to financial assets.
Asian markets were also lower following a sharp decline in US stocks. US stocks fell sharply last Friday on surging bond yields after a stronger-than-expected jobs report.