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

Equity indices close at 2-month low, auto stock suffer amid grow
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Mumbai: 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 percent at 38,337. The Nifty 50 shed 177.65 points or 1.53 percent to close at 11,419.

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

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

Reports said cumulative rainfall till July 17 was 15.8 percent below normal levels and the weekly rainfall 19.8 percent 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 percent to Rs 3,322 per share while Bajaj Finserve slipped 3.87 percent to Rs 7,544 per share.

Mahindra & Mahindra was down 2.5 percent, Tata Motors by 2.4 percent, Eicher Motors by 2.2 percent and Hero MotoCorp by 2.1 percent. 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.

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