Sensex at closing
The month of May is proving toxic for Indian shares. Globally, the deepening worries over the euro zone are weighing on risk assets, with the post-Greek election uncertainty hitting Asian shares on Wednesday.
That worsening global risk environment is combining with the concerns over taxation of foreign investors in India and doubts about the country’s economic and fiscal outlooks.
As a result, markets are turning defensive, especially as foreign investors show signs of exiting some of their Indian holdings, with net sales of nearly Rs 1,000 crore ($187.88 million) in the last two sessions, according to provisional exchange and regulatory data.
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Mint’s Lisa Pallavi Barbora gives you the lowdown on Indian markets on a day that saw the Sensex fall to a near four-month low
The 30-share BSE index fell 0.4% to 16,479.58 points. The country’s benchmark index has now lost 4.8% in May, worse than the 4.2% fall in the MSCI Asia-Pacific index excluding Japan.
The 50-share NSE index lost 0.5% to 4,974.80 points.
“4,600-4,800 on Nifty is quite likely in near-term as investors may use excuse of global risk aversion to exit India’s macro problems and tax policies,” said Sandeep J Shah, the CEO of Sampriti Capital, an investment advisory firm.
Among decliners on Wednesday, Reliance notched its sixth consecutive losing session, falling 1.9% to end at its lowest close since 2 January.
The shares of the energy conglomerate were hit after it cut estimates for proven gas reserves in its Indian blocks, in the latest negative news impacting Reliance.
Also on Wednesday, JP Morgan warned of a potential “political stand-off” between Reliance and the government after the Petroleum Ministry ruled against the company’s petition to recover more than $1 billion of its KG basin investments.
Banks, one of the outperforming sectors in the January-March quarter, continued a miserable month, with the NSE banking index now down 8.5% in May.
State Bank of India fell 3.7% on Wednesday, while ICICI Bank fell 1%.
Mahindra & Mahindra lost 3.2% on news that fire broke out in one of the storage areas for a plant that manufactures its Scorpio and Xylo TCF vehicles in North Maharashtra.
Shares in Punjab National Bank fell 2.1% to its lowest level since early January after reporting a rise in non-performing assets in its Jan-March earnings.
However, among gainers, ITC shares added 5.73%, reversing a slump over the previous seven sessions, as analysts say the changes to the pricing methodology for a proposed excise duty would be positive for cigarette manufacturers
Software services exporter Tata Consultancy Services rose 2.1% and Wipro gained 0.6% on bargain-hunting after steep falls in the prior session.
Generic drugmaker, Ranbaxy Laboratories added 4.2% after its January-March net profit rose four-fold, boosted by forex gains and Lipitor sales.
