Mumbai Feb 5 (IANS) With disappointment over the reintroduction of the long-term capital gains (LTCG) still looming over the Indian markets the key equity indices on Monday slid into the negative territory for the fifth consecutive session following weak global cues and selling pressure.
According to market observers announcements in the Budget like the LTCG tax and a higher-than-expected fiscal deficit target for 2018-19 continued to dampen investors risk-taking appetite.
The barometer 30-scrip Sensitive Index (Sensex) on the BSE closed below the 35 000-level at 34 757.16 points -- down 309.59 points or 0.88 per cent from Friday s close.
The BSE market breadth was bearish as 1 753 stocks declined as against 1 027 advances.
The wider Nifty50 of the National Stock Exchange receeded by 94.05 points or 0.87 per cent to close at 10 666.55 points.
"Markets corrected further on Monday however a slow bounce back from the lows helped to curb the losses. The weakness came on the back of a hit in investor sentiments after the Finance Minister had announced bringing the LTCG tax in Union Budget 2018 and projected a higher-than-expected fiscal deficit of 3.3 per cent for FY19 " Deepak Jasani Head Retail Research HDFC Securities told IANS.
"Weakness in global equity markets further added to the selling pressure in the Indian markets. Major Asian markets closed on a negative note barring the Shanghai index while the European indices like FTSE 100 DAX and CAC 40 traded in the red " he said.
In the broader markets the S&P BSE mid-cap index closed lower by 0.09 per cent and the small-cap index by 0.37 per cent.
Contrary to the view of market analysts the government said the downslide of the equity indices was not in reaction to the LTCG tax reimposition announcement but negative global cues.
"It is not due to the Budget or the LTCG. Dow Jones has also fallen by over two per cent " Finance Minister Arun Jaitley told reporters on Monday.
On the currency front the Indian rupee closed flat at 64.06 against the US dollar.
Provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 1 263.57 crore while domestic institutional investors purchased stocks worth Rs 1 163.64 crore.
Vinod Nair Head of Research Geojit Financial Services said: "Selling continued in the market as concern over bond yield and weak global market impacted the sentiment."
"Upcoming RBI monetary policy will be a key trigger for the market the outcome of which is expected to be status quo but any commentary over government s fiscal policy and concern over rising yield will add volatility " he added.
Sectorwise the S&P BSE capital goods index declined by 528.85 points followed by banking index by 333.43 points and finance index by 91.16 points.
On the other hand the S&P BSE auto index edged higher by 184.46 points telecom index by 23.85 points and FMCG index by 20.94 points.
Major Sensex gainers on Monday were: Bharti Airtel up 4.20 per cent at Rs 439.50; Tata Motors up 3.12 per cent at Rs 396.05; Tata Motors (DVR) up 2.27 per cent at Rs 218.80; Power Grid up 2.08 per cent at Rs 196.50; and ITC up 1.43 per cent at Rs 279.25.
Major Sensex losers were: HDFC down 4.06 per cent at Rs 1 825.95; Larsen and Toubro down 3.65 per cent at Rs 1 362.75; Kotak Bank down 2.66 per cent at Rs 1 058.55; IndusInd Bank down 2.36 per cent at Rs 1 714.25; and Bajaj Auto down 2.12 per cent at Rs 3 174.
--IANS
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