Stocks: Belligerent offloading by foreign funds on worries over the controversial tax issue kept the market under pressure for the second straight week as the benchmark BSE Sensex and the CNX Nifty collapsed by 3.5 per cent to more than three months lows during the week.
The market was already under stress after Meteorological Department forecast below-normal rainfall this year, disappointing fourth quarter results by some key counters and fall in country’s export by 21 per cent in March.
The issue of payment of Minimum Alternate Tax (MAT) by Foreign Portfolio Investors (FPIs) failed to soothe nerves of investors despite government’s clarification that such MAT would not be applicable to the entities based in countries having double taxation avoidance agreement (DTAA) with India, while others can approach the courts for respite.
Weakening rupee value to three-and-half-month low amid fading hopes of a rate cut by the Reserve Bank (RBI) after forecast of below-normal monsoon too weighed on sentiments.
The market closed in negative terrain for four out of five days of the week.
Investors’ confidence was so much shattered that all 12 sectoral indices closed with sharp losses between 7.69 per cent and 1.28 per cent with shares from realty, IT, teck, healthcare, oil&gas, capital goods and power segments bearing the most.
The BSE 30-share gauge touched a high of 28,539.46 immediately on the first day of the week, but succumbed to heavy selling and remained in negative terrain for rest of the week to log a low of 27,344.70 before concluding at 27,437.94, registering a biggest weekly fall of 1,004.16 points or 3.53 in the current calender year.
In straight two weeks, it has crashed by 1,441.44 points or 4.99 per cent.