Published on 19/07/2019 4:18:01 PM | Source: Reuters

Nifty, Sensex see heavy selloff amid weak results, surcharge woes

Posted in Stock Market| #Sensex #Stock Market #NSE #BSE #Nifty

Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel 

Download Telegram App before Joining the Channel


Now Get news on WhatsAppClick Here To Know More

By Chris Thomas

Indian shares fell sharply on Friday afternoon to close at their worst levels since mid-May, as investors fretted over weak corporate earnings and the government's refusal to tweak the surcharge on foreign investors.

The broader NSE Nifty dropped 1.53% to 11,419.25, while the benchmark BSE Sensex closed 1.44% lower at 38,337.01. The indexes posted their second straight weekly loss.

Whatever hopes there were around the finance minister removing the surcharge on foreign investors have been dashed, said Neeraj Dewan, a director with Quantum Securities, New Delhi, adding that sentiment had also been dampened by weak earnings by some lenders.

Finance Minister Nirmala Sitharaman said on Thursday that foreign portfolio investors could instead register as companies to avoid a new tax surcharge imposed on individual tax payers as well as trusts in the budget for the fiscal year that began on April 1.

Corporate earnings for the June quarter have also failed to impress investors, with several lenders flagging stress in their books. IT heavyweight Tata Consultancy Services Ltd, which kicked off the results season last week, also reported lower margins.

Financial and auto stocks accounted for most of the losses.

Bajaj Finance Ltd declined 4.2%, while Indiabulls Housing Finance Ltd dropped 3.7%.

RBL Bank Ltd plunged 13.7% to its lowest close since Oct. 29 after the lender highlighted risks to its asset quality, despite reporting a 41% jump in quarterly profit.

Larger rival Yes Bank Ltd reported a weak quarter earlier this week, sparking a sell-off in its stock. Its shares declined 3% in the current session.

Auto maker Mahindra and Mahindra Ltd was the biggest loser in the market, sliding 4.4% to its lowest close since Feb. 2016, while peers Tata Motors Ltd and Eicher Motors Ltd dropped 3.7%-4%, driving the Nifty Auto index 3.3% lower.

Meanwhile, electricity producer NTPC Ltd was the top gainer among the seven stocks in the green on the NSE Nifty, closing 2.2% higher.

The Mumbai market moved inversely to its global peers, which rose as investors bet on a U.S. interest rate cut at the end of July after a speech by a top Federal Reserve official further cemented expectations for one.

(Reporting by Chris Thomas in Bengaluru; editing by Gopakumar Warrier & Uttaresh.V)