Sensex, Nifty fall nearly 1% each on STT surge, other concerns
Indian stocks posted losses for a third straight week due to volatility and widespread selling after the government increased the securities transaction tax (STT) on futures and options contracts, along with other changes in Finance Bill 2023.
The Nifty 50 index closed 0.77 percent lower or 131.90 points at 16,945.05, surpassing the psychological level of 17,000. The S&P BSE Sensex fell 398.18 points, or 0.69 percent, to 57,527.10. Both benchmarks recorded weekly losses of nearly 100 percent.
All sector indices ended in the red, with Media, Metal, Realty and PSU Bank falling the most. IT held strong through the session, but finished with marginal losses.
Bajaj Finserv was the biggest loser among Sensex voters, losing 3.81 percent, followed by Bajaj Finance, Tata Steel, Reliance Industries, HCL Tech, SBI, Larsen & Toubro and Mahindra & Mahindra, Axis Bank and Titan.
On the other hand, Kotak Mahindra Bank, Infosys, Tech Mahindra, Power Grid, Asian Paints and Wipro were the winners.
Under the amended Finance Bill, Mutual Funds (MFs) will now attract short-term capital gains if they invest less than 35 percent of their assets in equities.
Futures & Option (F&O) trading will cost more from April 1, 2023 as the Finance Bill 2023 amendment provides for an increase in Security Transaction Tax (STT) on the sale of options and futures. The amendment to the Finance Bill 2023, submitted and approved by Lok Sabha on Wednesday, informs that STT applicable to the sale of options has been increased by 23.52 percent
“Signals from both the global and domestic markets have been subdued. The asset management industry was hit hard by tax changes and the elimination of the indexation benefit of debt funds. Volatility was fueled by weak European markets, which was driven by banking stocks as the CDS spread widened. While all major sectors traded in the red, sales in the IT sector remained subdued despite warnings of subdued growth,” said Vinod Nair, Head of Research at Geojit Financial Services.
While Bank Nifty fell 221 points or 0.56% to 39,395. Forty-one of the Nifty 50 voters fell on Friday.
“The Bank Nifty Bears took control on the last day of the week and the index ended negative. As long as the index does not cross the 40000 level, the index will remain in a sell on rise mode. The immediate support to the downside is at 39000 and a break below that will lead to a sharp decline. The momentum indicator RSI trading in the bearish zone confirms the index’s weakness,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
Meanwhile, the rupee fell 25 paise to close at 82.45 against the US dollar.
The global oil benchmark Brent crude fell 1.73 percent to USD 74.60 a barrel.
Foreign portfolio investors left shares worth €995.01 crore on Thursday after a one-day breather, according to exchange data.
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