Even as the benchmark Sensex at the Bombay Stock Exchange fell by 2.34 per cent on Friday, a day after the government announced to impose a 10 per cent long-term capital gains tax on equity gains in excess of Rs 1 lakh, the broader markets witnessed sharper falls. While the BSE 500 index fell 2.89 per cent, the midcap and small cap indices at BSE fell 4.03 and 4.65 per cent respectively, thereby bearing a higher brunt. As the market fell sharply and dented stocks across sectors, the number of advances to decline ratio fell sharply on Friday. While 295 stocks saw an uptick in their share price over previous closing, 2,548 stocks saw a decline in their prices. Among the Sensex companies, 28 out of the 30 companies witnessed a decline in their prices. Bajaj Auto (-4.9%) was the biggest loser while Axis Bank and Maruti Suzuki fell by 4.3 per cent each. The only two gainers were TCS and HUL that rose 0.33 per cent and 0.1 per cent respectively during the day. Beyond Sensex companies, the biggest losers were PC Jewellers and GMR Infra as their share prices fell 24.4 per cent and 15.4 per cent, respectively. During the day while the foreign portfolio investors invested a net of Rs 950 crore in the market, the domestic institutional investors sold equities worth Rs 508 crore. Experts say that while LTCG, along with decline in global indices played on investors mind, the sharp fall was also triggered by margin selling by traders as they looked to limit their losses. "Margin selling got triggered after the Sensex fell by over 500 points and it took the markets down further. The fall has been triggered both by imposition of LTCG and by overall weakness in the global markets," said the CEO of a broking firm. A report prepared by IIFL Private Wealth said that the markets saw a knee-jerk reaction post budget and that the midcap free float index sheds fell 8 per cent. "Street frets over LTCG tax, perturbed by multiple tax layers on income source. Also, emerging markets are nervous as benchmark 10-year U.S. yield touched 2.8 percent which is fresh high since 2014," said the report adding that the markets were also concerned about higher than expected fiscal deficit target of 3.3 per cent for 2018-19. Some say that markets opened weak on account of global market volatility led by rising bond yields, domestic profit booking and growing concerns on deteriorating macro-economic condition. Among the sectoral indices at BSE, the biggest loser was the real estate as it fell 6.3 per cent, the power and capital goods indices too lost 3.9 and 3.6 per cent respectively. Almost all major sectoral indices came under pressure during the day. The most resilient was the IT index as it fell by only 0.4 per cent. Even the tech and FMCG indices fell less than 1 per cent during the day.
