SENSEX TUMBLES
The Sensex plunged 1,000 points intra-day due to sale by FPI
The equity markets sank on Monday with the Sensex plunging over 1,000 points intra-day triggered by heavy selling by foreign portfolio investors (FPI) on lower than expected earning numbers from India Inc and tax notices served on the overseas investors, demanding the payment of minimum alternative tax (MAT) totalling `40,000 crore.
The total market capitalisation of all the BSE listed companies declined by `1,59,620 crore to `1,02,64,003 crore.
The continuing uncertainty over the fate of land acquisition amendment bill also weighed on the investor sentiment as it has raised concerns about the pace of economic reforms in India.
After opening the day on a negative note, the Sensex witnessed a free fall plunging 555.89 points or 1.95 per cent to end the trading session at 27,886.21.
During the past four trading sessions, the Sensex has lost over 1,200 points. Meanwhile, the Nifty lost 157.90 points or 1.83 per cent to end the trading session at 8,448.10.
According to the provisional data released by the stock exchanges, FPIs sold shares worth `1,506.86 crore. The heavy selling by portfolio investors also saw the rupee witnessing its worst intra-day fall since December 16, 2014.
The partially convertible rupee fell sharply and touched an intra-day low of `62.91 to the dollar before ending the day at `62.56 to the dollar on Monday.
“Earlier, tax notices were served on few overseas investors. But the list has grown bigger following which foreign investors have turned net sellers in the Indian markets for the last few days,” said Ambareesh Baliga, a veteran market expert.
According to him, disappointment in corporate earnings and uncertainty over the Land Acquisition amendment bill also impacted investor sentiments.
Reliance Industries Ltd (RIL) was the biggest loser among the Sensex constituents. The shares of RIL fell 4.46 per cent on the BSE.
“Markets continued their correction, as the Q4 numbers have so far failed to bring any positive surprises. Now, the markets are concerned about a downgrade of FY16 earning estimates by 3-5 per cent,” said Vinod Nair, head of fundamental research, Geojit BNP Paribas Financial Services, adding, investors would watch the second half of the budget session very closely.