Sensex continues to fall for fifth week as Budget disappoints

Stock market continued to fall for the fifth week by slipping 398 points to close below 19,000 level after three months due to sustained selling pressure.

Updated: Mar 02, 2013, 16:17 PM IST

Mumbai: Stock market continued to fall for the fifth week by slipping 398 points to close below 19,000 level after three months due to sustained selling pressure as the government slapped more taxes on companies as well as super rich and offered little concessions for large investors in the Union Budget.

Confusion over the Tax Residency Certificate (TRC) announced by the Finance Minister on the budget day, which created fear among the foreign investors, also weighed on the market sentiments.

However, the Finance Ministry on Friday sought to assure worried investors saying that their concerns on TRC for claiming treaty benefits would be "suitably addressed" during discussion on Finance Bill in Parliament.

Rail Budget also failed to inspire investors which were already rattled by fears of worsening EU debt crisis following poll stalemate in Italy.

Profit-booking on the expiry of February series on Thursday also weighed on the market, traders said.

Realty, PSU, Refinery, Metal, Power, Capital Goods and Healthcare sectors declined sharply on profit-booking, while Consumer Durable, IT and Tech sectors firmed up on good buying enquiries.

Small-cap and Mid-cap shares also declined sharply by 5.63 percent and 4.36 percent, respectively, on panic selling triggered by speculation that pledged holdings are being sold.

The BSE benchmark Sensex resumed higher at 19,365.33 and moved in a wide range of 19,411.18 and 18,793.97 before ending the week at 18,918.52, a net loss of 398.49 points or 2.06 percent. It has lost 1,185.01 points or 5.89 percent in five weeks.

The NSE 50-share Nifty also dropped by 130.60 points or 2.23 pct to 5,719.70. It fell by 354.95 points or 5.84 percent in the last five weeks.

Banking stocks suffered heavy losses on liquidity concerns in banking system after government set target for gross market borrowing at Rs 6.29 trillion this fiscal.

The sentiment turned bearish on hike in some taxes despite reduction in Securities Transaction Tax on mutual fund and equity futures transactions.

Auto stocks, including Maruti, saw losses as government announced hiking excise duty on luxury cars and their parts.

The sensex bounced back on Friday on value-buying after the Finance Ministry promised to address concerns over Tax Residency Certificate (TRC).

In the Lok Sabha Railway Minister Pawan Kumar Bansal hiked freight tariff of less than five percent, effective from April 1 this year.

"There was nothing exciting in the budget and the freight rate hike could push up prices," said Pankaj Pandey, Head Research, ICICI direct.

24 scrips out of 30-share sensex finished in red while only six ended in green.

Major losers from the sensex pack were Hindalco Ind (7.65 percent), Tata Steel (6.27 percent), Reliance Ind (6.16 percent), HDFC Bank (5.79 percent), Coal India (5.46 percent), SBI (4.88 percent), Sterlite Ind (4.31 percent), DR Reddy's Lab (4.21 percent), ICICI Bank (3.23 percent), Cipla (2.85 percent), ONGC (2.84 percent), HDFC (2.76 percent), Gail India (2.62 percent) and Larsen (2.40 percent).

However, TCS rose by 3.10 percent followed by Infosys 2.53 percent, Wipro 1.36 percent and Bajaj Auto 1.54 percent.

Among the major indices the BSE-Realty dropped by 8.60 percent followed by the BSE-PSU 5.00 percent, the BSE-Oil&Gas 4.59 percent, the BSE-Metal 4,56 percent, the bankex 4.43 percent, the BSE-Power 3.84 percent, the BSE-Capital Goods 3.55 percent, the BSE-HC 2.50 percent.

The Dollex-200 and the dollex-100 also fell by 3.45 percent and 3.37 percent respectively.

However, the BSE-Consumer Durable firmed up by 3.71 percent followed by the BSE-IT 2.39 percent and the BSE-Teck 1.71 percent.

Meanwhile, Foreign Institutional Investors (FIIs) slowed down their buying by investing just a net Rs 543.99 cr during the week, including the provisional figure of February 28.

The total turnover at BSE and NSE jumped to Rs 11,598.65 cr and Rs 66,171.13 cr respectively from Rs 8,773.91 cr and Rs 49,738.97 cr last week.