Leaders Online: The Indian stock market fell sharply on Friday. In today's trading session, the Sensex fell by as much as 793 points to close at 74,244. Nifty fell by 234 points to settle at 22,519. All-round selling hit was seen in all sectors today. Smallcap and midcap indices were hit hard by today's sell-off.
Rising inflation in the US has reduced the possibility of an interest rate cut by the Federal Reserve. This has led investors to turn their attention to the earnings of domestic corporates. Against this background, Sensex and Nifty fell by around 1 percent. All sectoral indices turned red today. Nifty Pharma, Nifty PSU Bank and Nifty FMCG indices were the worst hit. These indices fell by 1 percent each. BSE Midcap fell 0.4 percent while Smallcap fell 0.6 percent.
2.42 lakh crore hit to investors
Market capitalization of BSE listed companies fell by Rs 2.42 lakh crore to Rs 399.77 lakh crore due to today's fall in the market. On Wednesday, April 10, the market capitalization was 402.19 lakh crore. Today it decreased by Rs 2.42 lakh crore.
'Ha' shares fell
The Sensex opened at 74,889 today. It then fell below 74,300. Shares of Sun Pharma fell 4 percent to close at Rs 1,539 on the Sensex. Shares of Maruti fell 3 percent to Rs 12,274. Shares of Power Grid, Titan, JSW Steel, Tech Mahindra, Ultratech Cement, LT, SBI, Asian Paints, Axis Bank, Infosys, ITC, Hindustan Unilever, HDFC Bank, Wipro also declined between 1-3 percent. While Tata Motors, TCS shares showed marginal growth.
Top losers on the Nifty were Sun Pharma, Maruti Suzuki, Power Grid Corporation, Titan Company and ONGC. While shares of Divis Labs, Tata Consumer Products, Bajaj Auto, Tata Motors and TCS remained bullish.
Pressure from FPIs
The government has decided to end tax concessions for foreign portfolio investors (FPIs) coming through Mauritius. A tax treaty was signed between India and Mauritius on March 7. But the information about this was first made public on April 10. Amendments to the India-Mauritius tax treaty will make foreign investors coming through Mauritius face scrutiny. A Principal Purpose Test (PPT) has been introduced under this amendment. The purpose behind this is to prevent misuse of tax exemptions by taxpayers.
Foreign institutional investors and high net worth individuals (HNI) are investing in India through some countries like Mauritius for tax benefits. Mauritius is the fourth largest source of foreign investment in India. But now the rules for investment coming through Mauritius have been tightened.
A rise in US inflation
The rate of inflation in America continues to rise. Higher-than-expected retail inflation in March dampened hopes of an interest rate cut in June. The US Consumer Price Index (CPI) rose 0.4 percent in March. Like February, the inflation rate has maintained its pace of growth in March. The Consumer Price Index rose 0.4 percent last month, the US Labor Department's Bureau of Labor Statistics (BLS) said. This growth has been more than expected.