Weekly Recap of Stocks: Market falls after FM introduces LTCG tax

stock market weekly reportsIndian stock markets dropped sharply during the week ended Friday, 2 February 2018, as investors were dissatisfied after the govt proposed long-term capital gains tax on equity gains in the Budget-2018 tabled on 1 February 2018. The Sensex, Nifty settled below the crucial 36,000 and 11,000 marks respectively. Market registered declines in 4 out of 5 trading sessions of the week.

In the weekend Friday, 2 Feb,2018, the BSE-Sensex in its biggest single-day fall in two-and-a-half years crashed 839.91 points to close at 35,066.75, while the Nifty took a crash by 256.30 points or 2.33% to end below the 10,800-mark.

The broader market BSE Small and mid-cap indices plunged over 4 per cent each. The week logged Midcap Index retracing 8 percent from its peak, sharpest decline since the November 2016. On a weekly basis, this is the first week of fall and possibly the worst weekly performance in last 2 years in Nifty.

The Govt set the fiscal deficit target of 3.3% for 2018-19, higher than market expectation of 3.2%. Banking stocks were among the worst laggards on Friday, with the BSE Bankex falling near to 3%. A higher than projected fiscal deficit has led to a spike in govt bond yields, with the Ten-year yield up 110 base points since July 2017. The government also introduced 10% long-term capital gains.

All the BSE sectoral indices suffered with losses on Friday, with the Realty index slipping the most at 6.3%. Only 295 stocks gained, while 2548 ended with losses on the BSE.

Among Sensex constituents, Axis Bank, Bajaj Auto, Reliance Industries and Maruti fell severely at more than 4% each. Foreign portfolio investors (FPIs) bought shares valued Rs 9.50 billion, while domestic Institutional investors (DIIs) pulled out Rs 5.10 billion, as per exchange data.