Persistent selling pressure in view of rising inflation and contraction in industrial production data pulled Sensex down by hefty 538 points to a near 4-month low of 16,298.98 in spite of fair amendments made by the Finance Minister in finance bill,mainly regarding GAAR.
With this week’s fall,the market completed straight three weeks of losing string. The BSE benchmark Sensex collapsed by 1,080.86 points,or 6.22 per cent,and the Nifty by 361.95,or 6.84 per cent.
Selling was seen across-the-segment as all 13 sectoral indices closed in the red between 0.5 per cent and 4.67 per cent.
Shares of power,IT,metal,realty,banking and healthcare sectors bore the brunt of heavy sell-off from operators and investors and ended with losses.
Only three — Bajaj Auto,BHEL and DLF — out of the 30 Sensex-based components closed with gains.
Fall in heavyweights like RIL,Infosys,TCS,Wipro,Tata,Steel,Jindal Steel,Coal Ind,Hindalco,Sterlite Ind,ICICI Bank,HDFC Bank,SBI,ITC,M&M,Tata Power,NTPC,Hero MotoCorp,Maruti Suzuki and Sun Pharma,mainly contributed to the Sensex’s fall.
The benchmark Sensex recovered its early losses on the first day of the week and rose by 82 points on fag end buying after investors cheered Finance Minister Pranab Mukherjee deferring controversial General Anti-Avoidance Rules (GAAR) in Parliament to 2013/14,giving some sigh of relief to the foreign investors.
The government also halved the capital gains tax for private equity investors to 10 per cent and decided to withdraw the levy on all precious metal jewellery,branded and unbranded,with effect from March 17,2012 with thresholding limit for TCS (tax collection at sources) on cash purchase of jewellery will be raised to Rs 5 lakh from the present Rs 2 lakh.
The 30-share barometer,after gaining on the first day,remained in the negative terrain for the next four days on brisk selling after the apex banks’s weak outlook for rate cuts sustained weakness in the rupee and foreign investors concern over the clarity over the GAAR amid fresh eurozone worries.
The Sensex further fell to a low of 16,233.76 before ending the week at about 4-month low of 16,292.98,lowest closing since January 17,2012,a net fall of 538.10 points or 3.20 per cent.
The NSE 50-share Nifty also plunged by 157.95 points or 3.11 per cent to finish the week below 5K-mark after January 19,2012,at 4,928.90.
Index of Industrial Production (IIP) sliming down by 3.5 per cent in March 2012 mainly due to contraction in manufacturing and mining output against a growth of 4.1 per cent in February and 9.4 per cent in the same month last year,indicated sharp slowdown in the economy.
Finance Minister Pranab Mukherjee expressed disappointment at IIP numbers announced on Friday,blaming slowdown in the west and domestic economy for contraction and also said that RBI’s monetary policy easing will take some time to translate into reduction in interest cost.
IT shares fell sharply after information technology services company Cognizant Technology Solutions lowered its revenue guidance for 2012.
Infosys fell by 5.30 per cent after the Reserve Bank of India said all foreign-exchange earners have to convert 50 per cent of the total foreign exchange earnings kept in banks into rupees. Indian IT firms derive the lion’s share of revenue from exports.
“Future RBI action and foreign flows will likely be dictated by government’s reform initiatives and the outlook on the monsoons. We believe that,markets will start moving up sustainably,only once there are indications of reform initiatives being taken up by the government,” said Dipen Shah,Head of Fundamental Research,Kotak Securities.
Tata Power company tumbled by 7.39 per cent and was the top loser from the Sensex pack.
Other losers from the Sensex pack were SBI (7.09 per cent),Hero Motocorp (6.94 per cent),Sterlite (5.93 per cent),Jindal Steel (5.48 per cent),Sunpharma (5.17 per cent),Tata Steel (5.03 per cent),HDFC Bank (4.83 per cent),M&M (4.75 per cent),Coal India (4.60 per cent),NTPC (4.26 per cent),Reliance Industries (4.01 per cent),Maruti Suzuki (3.83 per cent),TCS (3.65 per cent) and Wipro (3.40 per cent).
However,Bajaj Auto shot up by 3.56 per cent followed by BHEL (3.29 per cent) and DLF (3 per cent).
Among the major indices the BSE-Power fell by 4.67 per cent followed by the BSE-IT 4.38 per cent,the BSE-Metal 4.31 per cent,the BSE-Realty 4.07 per cent,the Bankex 3.97 per cent,the BSE-Teck 3.83 per cent,the BSE-Healthcare 3.36 per cent,the BSE-PSU 3.12 per cent,the BSE-Oil&Gas 2.45 per cent and the BSE-Auto 2.45 per cent.
Small cap and Midcap indices were also declined sharply by 2.93 per cent and 2.49 per cent respectively due to selling from retail investors.
The Dollex-30,the the Dollex-100 and the Dollex-200 were the biggest sufferers due to fall in the rupee and moved down sharply by 8.54 per cent,8.52 per cent and 8.41 per cent,respectively.
The total turnover at BSE and NSE rose to Rs 10,116.53 crore and Rs 52,549.60 crore respetively from the last weekend’s level of Rs 8,034.71 crore and Rs 39,915.45 crore.