Sensex slumps 309 points as inflation threat spooks global markets; Nifty closes at 10,666

Market close: The Sensex and Nifty ended the session down by nearly one per cent due to global sell-off and cautious stance adopted by investors ahead of RBI monetary policy meet.

The S&P BSE Sensex ended lower by 309.59 points or 0.88 per cent at 34,757.16 and the Nifty50 ended down by 94.05 points or 0.87 per cent at 10,666.55.

The sell-off in equity markets is due to a weak global sentiment and not because of long term capital gains tax announced in the budget, said Finance Secretary Hasmukh Adhia.

Top five Sensex losers were HDFC, L&T, Kotak Bank, IndusInd Bank and Bajaj Auto, while the major gainers were Bharti Airtel, Tata Motors, PowerGrid, ITC and Sun Pharma.

 

Major gainers, losers : Click here to read the full table

BSE sectoral indices

NSE sectoral indices

 

Global markets : All major indexes in Europe fell: the UK’s FTSE 100 dropped 1 per cent, France’s CAC 40 0.8 per cent and Germany’s DAX 0.6 per cent. Click here to read more

 

European markets : Europe’s STOXX 600 sank 1.1 per cent, in line with euro zone stocks and on track for its sixth straight day of decline. Read more

 

Salaried people paying more tax: There is “unevenness” in the taxes paid by the salaried class and business people, as 50 per cent of the 7 lakh companies which file I-T returns show zero or negative income, says Finance Secretary Hasmukh Adhia. Read more

 

ULIPs turning attractive: With the Budget spooking market sentiment with the 10 per cent long term capital gains tax on equities gains, Morgan Stanley has opined that ULIPs could be relatively attractive from a medium-to long-term perspective. More on this

 

Bullion prices : Gold prices edged higher by Rs 20 to Rs 31,270 per 10 grams. Silver dropped further by Rs 300 to Rs 39,500 per kg. Read more

 

Profit-booking by investors amid a global rout pulled the domestic indices down by over one per cent. The 30-share BSE index Sensex was trading lower by 373.04 points or 1.06 per cent at 34,693.71 and the 50-share NSE index Nifty down by 112.55 points or 1.05 per cent at 10,648.05. Top five Sensex losers were HDFC, L&T, Kotak Bank, IndusInd Bank and Bajaj Auto, while the major gainers were Bharti Airtel, Tata Motors, PowerGrid, ITC and Sun Pharma.

Sensex gainers, losers

Nifty chart

 

Top Nifty gainers

Top Nifty losers

 

Aster DM Healthcare IPO : The company has fixed a price band of Rs 180-190 per equity share for its initial share sale that is expected to garner Rs 980 crore. The IPO will open on February 12 and close on February 18. More on this

 

CBDT issues 24 FAQs on LTCG tax: The Central Board of Direct Taxes (CBDT) has issued 24 frequently asked questions (FAQs) on  long term capital gains (LTCG)  taxation on equity shares proposed in the recent Union Budget. Read more

 

New LTCG rules : Click here to read the full document

Revenue deficit : Recognising the requirements for health and education to build human capital, the Budget has proposed doing away with the concept of revenue deficit as part of the Centre’s fiscal consolidation roadmap. Click here to read more

 

Fiscal deficit slippage : The Finance Minister stated in the Budget speech that the slippage in the fiscal deficit numbers for FY18 was partly on account of non-inclusion of the GST collection for March. More on this

 

Bull-call spread on PC Jeweller: Traders can consider a bull-call spread on PC Jeweller as we expect wild swing on the stock before settling for a direction. This can be engineered by buying ₹360-call and simultaneously selling the ₹370-call. Click here to read more

 

Media and entertainment industry is expected to clock healthy growth due to changing consumption pattern and increasing income levels. PVR stock stands to benefit from this trend. Click here to read more

 

Sell-off in domestic equities continued for a third session due to heavy profit-booking by investors amid a global rout in equity markets. Global markets suffered losses of up to 2.4 per cent today after deep correction in the US markets last week triggered by a sharp rise in Treasury yields.

The 30-share BSE index Sensex was trading lower by 329.4 points or 0.94 per cent at 34,737.23 and the 50-share NSE index Nifty down by 97.05 points or 0.9 per cent at 10,663.55.

Investors remained worried as the Reserve Bank of India is likely to keep the repo rate steady in the sixth bi-monthly monetary policy in the backdrop of rising retail inflation even as the underlying policy tone could turn hawkish.

S&P BSE Sensex

Nifty50

BSE sectoral indices

NSE sectoral indices

 

Sell-off not due to LTCG tax : The sell-off in equity markets is due to a weak global sentiment and not because of long term capital gains tax announced in the budget, says Finance Secretary Hasmukh Adhia. Read more

 

Services index at 3-month high : The Nikkei Services Business Activity Index registered its fastest rise in three months in January to stand at 51.7, led by expansion in the Information & Communication sub-sector. Click here to read more

 

Budget deficit target: Slight slippage in the  budget deficit target  has no material impact on the country’s overall fiscal strength and is in line with the global credit rating agency’s expectations. Read more

 

 

RBI monetary policy : The Reserve Bank of India is likely to keep the repo rate steady in the sixth bi-monthly monetary policy in the backdrop of rising retail inflation even as the underlying policy tone could turn hawkish. More on this

 

Lowest tax liability : India’s most profitable companies paid 23.9 per cent tax on an average on their profits for financial year 2016-17, due to a wide range of concessions and incentives. These companies, 335 in all, may see little change to their tax liability if the corporate tax was cut to 25 per cent and all concessions withdrawn immediately. Click here to read more

 

Fiscal deficit target : Many analysts, including Fitch Ratings, have raised doubts about the fiscal consolidation targets, given that the target of 3 per cent fiscal deficit is now deferred till 2020-21. Are their apprehensions valid? Click here to read the full text

 

Brokerages remain positive : Despite important negatives in the Budget such as slight slippage in fiscal deficit target for FY19 and imposition of long-term capital gains tax on equities, most brokerages have either given a thumbs up to the Budget or some including Jefferies, IIFL and Morgan Stanley at least think the Budget has been neutral to the economy or markets. Read more

 

The Sensex recovered from the intraday low of 34,520.80 but was still trading down by nearly 300 points on heavy selling in capital goods, bank, realty and consumer durables stocks amid a global rout in equity markets. Similarly, the Nifty rebounded from the day's low of 10,601 but was still trading lower by nearly 100 points.

Domestic markets recovered from the intraday lows after Moody's Investor Service said slight slippage in the budget deficit target has no material impact on the country’s overall fiscal strength and is in line with the global credit rating agency’s expectations.

At 11.40 a.m. local time, the Sensex was trading lower by 285.11 points or 0.81 per cent at 34,781.64 and the Nifty down by 91.8 points or 0.85 per cent at 10,668.80.

 

BSE top losers

NSE top losers

 

Weekly trading guide

SBI (₹296.9) : Short-term outlook is bearish. Immediate support is at ₹294 — the 200-day moving average. If the stock sustains above this support, an intermediate bounce to ₹300 or ₹305 is possible. Read more

 

ITC (₹275.3) : The rounding pattern on the chart keeps the overall bullish outlook intact. But the stock may witness a slight fall in the short term. Resistance is at ₹285 which can cap the upside in the short term. Read more

 

Infosys (₹1,141.7) : Given the weakness in the broader market, Infosys is likely to remain under pressure below ₹1,165 in the short term. While below ₹1,165, the possibility is high of the stock breaking below ₹1,115. Read more

 

RIL (₹905.7) : RIL failed to sustain above ₹960 and tumbled 6 per cent last weekHigh-risk appetite traders can make use of rallies to go short at ₹930 and at ₹945. Stop-loss can be placed at ₹965 for the target of ₹855. Read more

 

Tata Steel (₹669.7) : Investors can hold the long positions and move the stop-loss to ₹630. But short-term traders can make use of rallies to go short at ₹700 and ₹710. Read more

 

Brent crude dips : Brent was down 75 cents, or 1.1 per cent, at $67.83 a barrel at 0033 GMT, after falling 1.5 per cent on Friday. US West Texas Intermediate (WTI) crude declined 66 cents to $64.79, after dropping 0.5 per cent in the previous session. Click here to read more

 

Gold prices fall : Gold prices inched down after robust US jobs data potentially increased the chances of more US interest rate hikes this year. Spot gold had dipped 0.2 per cent to $1,330.60 per ounce by 0257 GMT. More on this

 

US dollar remains firm : The dollar index against a basket of six major currencies stood little changed at 89.222 after gaining 0.6 per cent on Friday. More on this

 

Market outlook : Post Budget rout, domestic equities this week will look up to Reserve Bank’s monetary policy decision and quarterly earnings from bluechips such as Tata Motors, PNB and Cipla for direction. Read more

 

The Sensex was trading lower by 355.62 points or 1.01 per cent at 34,711.13 and the Nifty down by 107.20 points or 1.00 per cent at 10,653.40 on heavy selling in metal, capital goods, banking and realty stocks amid a global rout in equity markets.

The S&P BSE Sensex tanked 545.95 to an intraday low of 34,520.80 and the Nifty50 dropped 159.65 points to 10,600.95. Domestic sentiment was hit due to imposition of long-term capital gains of 10 per cent on equities in the Budget 2018.

BSE sectoral indices

 

NSE sectoral indices

 

How to check pump-and-dump operators : Instead of a blanket rule, exchanges can have two separate circuit filter mechanisms for the same stock. Currently, if a stock attracts 20 per cent circuit filter, it cannot go up beyond 20 per cent or fall below 20 per cent in a single session. That makes the job of operators easy.  Read more

 

M-cap of Sensex cos : The combined market valuation of seven of the top-10 most valued companies slumped to Rs 98,530.44 crore last week, with Reliance Industries and ONGC taking the steepest hit. More on this

 

FinMin not surprised : The market reaction to the long-term capital gains tax proposed in the Budget has not surprised the Finance Ministry. Click here to read more

 

Jaitley to address SEBI board meeting : Finance Minister Arun Jaitley will be addressing the first board meeting of SEBI on February 10 in Delhi to discuss various Budget-related issues and their implementation. Read more

 

Asian shares : Asian shares fell the most in over a year as fears of resurgent inflation battered bonds, toppled Wall Street from record highs and sparked speculation that central banks globally might be forced to tighten policy more aggressively. MSCI's broadest index of Asia–Pacific shares outside Japan shed 1.9 per cent in the largest daily drop since late 2016. More on this

 

Index Outlook: The indices are witnessing selling pressure at higher levels. With the global markets under pressure, the nervousness in the domestic markets can fuel further declines. Investors should remain cautious. Focus will be on the RBI policy, rupee movement and global indices this week. Click here to read more

 

 

 

 

 

US stocks: Worries about the impact of a tightening job market on the prospects for inflation and a surge in bond yields sent investors fleeing equities on Friday, with the Dow Jones Industrials Average swooning almost 666 points, for its biggest daily percentage loss in 20 months. Read more

 

At 9.15 a.m., the S&P BSE Sensex tanked 480.37 points or 1.37 per cent to 34,586.38 and the Nifty slumped 172.3 points or 1.6 per cent to 10,588.30.

The 30-share BSE index Sensex plummeted 347.90 points or 0.99 per cent to 34,718.85 and the 50-share NSE index Nifty plunged 156.30 points or 1.45 per cent to 10,604.30.