The stock market benchmark S&P BSE Sensex tumbled over 500 points in afternoon trade on Friday, i.e. 19 July, mainly led by decline in auto and finance stocks. At 1:34 pm, the Sensex was down 523.78 points, or 1.35%, to 38,373.68, while the Nifty declined 164.05 points, or 1.4%, to 11,432.85.
All the sectoral indices were trading in the red. The BSE Auto index was the biggest loser, down over 2.7%, followed by realty, consumer durables and banking indices, down by around 2% each.
Among the 30 Sensex stocks, just two were trading in the green – NTPC (up 1.4%) and Tata Consultancy Services Ltd (0.9%). Rest all were trading in the negative territory, with Bajaj Finance Ltd being the biggest loser (down 4.5%), followed by Tata Motors Ltd (down 3.7%) and Mahindra and Mahindra Ltd (down 3.4%).
Stock markets took a hit after finance minister Nirmala Sitharaman dashed hopes of any tweaks in the Finance Bill to ring-fence foreign portfolio investors (FPIs) from the effects of the “super-rich” tax proposed in the Union Budget 2019. “FPIs should consider the option of structuring themselves as companies rather than trusts to avoid paying the increased surcharge announced in Budget 2019,” Sitharaman said during a discussion on the Finance Bill in the Parliament on 18 July, adding: “FPIs registered as trusts will have to pay the new tax surcharge.”
Notably, foreign investors have pulled out more than Rs 5,000 crore from the cash segment of Indian equity markets so far in July.
Corporate earnings declared so far also gave no reason for the markets to cheer. Apart from Infosys and IndusInd Bank, which reported a healthy jump in profits, hardly any other company has surprised investors.
“Disappointing results from YES Bank and MindTree dented sentiments. In the absence of any near term triggers, the negative bias in Indian equities could continue with pronounced weakness in midcap space,” said Gaurav Dua, Sr VP, Head – Capital Market Strategy & Investments, Sharekhan.
Meanwhile, Reliance Industries Ltd, India’s largest company by market capitalisation, will declare its June quarter earnings later today. The refining and petrochemical volumes, and Jio and retail businesses are expected to be strong and may drive revenue growth on a sequential basis for the company. However, there could be some pressure on consolidated margin, which may impact profitability, say brokerages. The RIL stock was trading around 1% lower in afternoon trade.
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