Business

Equity indices close at 2-month low, auto stock suffer amid growth concerns

ANI | July 19, 2019 04:22 PM
Finance Minister Nirmala Sitharaman has dashed hopes of a tweak in FPI surcharge

Mumbai (Maharashtra) [India], July 19 (ANI): Equity benchmark indices extended losses in the afternoon trade on Friday with selling pressure across the board amid concerns over growth and earnings recovery.

Investors said the pressure built up quickly a day after Finance Minister Nirmala Sitharaman quelled hopes of a tweak in foreign portfolio investors (FPIs) surcharge.

At the closing bell, the BSE S&P Sensex was down 560.45 points or 1.44 per cent at 38,337. The Nifty 50 shed 177.65 points or 1.53 per cent to close at 11,419.

At the National Stock Exchange, all sectoral indices were in the red. Nifty auto was down 3.3 per cent, private banks 2.4 per cent, pharma 2.2 per cent and financial services 1.9 per cent.

Auto stocks were the worst sufferers as indices levelled at their two-month low. Mahindra & Mahindra dropped 4.4 per cent, Eicher Motors 3.8 per cent, Tata Motors 3.4 per cent and Hero MotoCorp 3.3 per cent.

Reports said cumulative rainfall till July 17 was 15.8 per cent below normal levels and the weekly rainfall 19.8 per cent below normal. On a regional cumulative basis, spatial distribution has been deficient across India which could lower income in rural areas and hence lead to lower sales.

At the same time, Bajaj Finance dropped 4.4 per cent to Rs 3,322 per share while Bajaj Finserve slipped 3.87 per cent to Rs 7,544 per share.

Mahindra & Mahindra was down 2.5 per cent, Tata Motors by 2.4 per cent, Eicher Motors by 2.2 per cent and Hero MotoCorp by 2.1 per cent. Among the other losers were IndusInd Bank, Yes Bank, and Indiabulls Housing Finance.

However, NTPC, Titan, Coal India, Tata Consultancy Services and Power Grid showed marginal gains.

The selling pressure mounted a day after Finance Minister Nirmala Sitharaman said FPIs should consider the option of structuring themselves as companies rather than trusts to avoid paying the increased surcharge announced in Union Budget for 2019-20.

FPIs registered as trusts will have to pay the new tax surcharge, Sitharaman said, quashing hopes that the government may tweak relevant portions of the Finance Bill to protect them from the effects of 'super-rich tax.'

Reports said foreign investors have pulled out more than Rs 5,000 crore from the cash segment of Indian equity markets so far in July. (ANI)

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