Stock market sentiments, already rattled in recent weeks by the Punjab National Bank loan scam and the Adani NPA issue, were further shaken on Friday as tax-related discrepancies came to light at India’s largest private sector company, Reliance Industries.

Despite a sense of calm in the global markets, the country’s key share indices Sensex and Nifty declined 1.5 per cent during the day.

At close, the Sensex was down 510 points at 33,176. The Nifty fell 165 points to close at 10,195.

Both the indices are down nearly 10 per cent from their life-time highs in January, which they scaled just before the Nirav Modi-PNB scam broke.

A further fall of even a little more than 1 per cent in the Sensex and the Nifty could take them below their 200-day moving average, a key technical support which, if broken, could lead to more institutional selling pressure, experts said.

The exit of the Telugu Desam Party from the ruling NDA alliance, and the no-confidence motion brought against the Modi government, also spooked markets.

RIL, which has the highest weight in both the indices, fell 2.85 per cent in intra-day trade. The stock attempted a pullback, but closed with a decline of 1.29 per cent at ₹900 on the BSE.

Another RIL group company, Reliance Industrial Infrastructure, fell 2.74 per cent.

“The PNB scam, the concern over Adani NPAs and now RIL’s tax discrepancies all weighed on the stock market sentiment,” said a promoter of leading stock brokerage house in Mumbai.

“RIL is a heavyweight and any red flag against it or other such companies in the current scenario, with the chatter over scams and crises in the banking system, could lead to panic.”

The government’s auditor CAG red-flagged practices followed by RIL to prima facie lower its tax burden; the company was also pulled up the I-T Department for not being vigilant.

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