Mumbai: Belligerent offloading by foreign funds on worries over the controversial tax issue kept the market under pressure for the second straight week as the benchmark BSE Sensex and the CNX Nifty collapsed by 3.5 percent to more than three months lows during the week.
The market was already under stress after Meteorological Department forecast below-normal rainfall this year, disappointing fourth quarter results by some key counters and fall in country's export by 21 percent in March.
The issue of payment of Minimum Alternate Tax (MAT) by Foreign Portfolio Investors (FPIs) failed to soothe nerves of investors despite government's clarification that such MAT would not be applicable to the entities based in countries having double taxation avoidance agreement (DTAA) with India, while others can approach the courts for respite.
Weakening rupee value to three-and-half-month low amid fading hopes of a rate cut by the Reserve Bank (RBI) after forecast of below-normal monsoon too weighed on sentiments.
The market closed in negative terrain for four out of five days of the week.
Investors' confidence was so much shattered that all 12 sectoral indices closed with sharp losses between 7.69 percent and 1.28 percent with shares from realty, IT, teck, healthcare, oil&gas, capital goods and power segments bearing the most.
The BSE 30-share gauge touched a high of 28,539.46 immediately on the first day of the week, but succumbed to heavy selling and remained in negative terrain for rest of the week to log a low of 27,344.70 before concluding at 27,437.94, registering a biggest weekly fall of 1,004.16 points or 3.53 in the current calender year.
In straight two weeks, it has crashed by 1,441.44 points or 4.99 percent.
The market is also facing selling by cautious operators and retail investors ahead of the expiry of April contract on Thursday.
Meanwhile, FPIs bought shares worth Rs 13,222.14 crore during the week, including provisional figure of April 24. The massive inflow of Rs 16,357.75 crore on April 21 includes a major chunk of Japan's Daiichi Sankyo stake sale in Sun Pharma which was picked up by foreign investors, including Goldman Sachs and Singapore government.
Jignesh Chaudhary, Head of Research, Veracity Broking Services said: "The correction continued in the Indian Equity Markets in this trading week as the markets opened upside, but then started collapsing for the entire week. The markets closed almost at three months low as on the last day Infosys was cut by almost 6 percent."
"The overall sentiments of the dealers were also cautious due to the expiry scheduled in the coming week. The Economic calendar in the coming week is also going to be active for Indian and the US economy GDP data is scheduled and it?s expected to reduce than the previous data release. The coming week according to trading technical?s would also observe some corrections and the sensex is expected to trade in the range of 26,750 to 27,400," he added.
"The bullish trend in Indian markets over the last one year was mainly driven by "positive surprise on rate cycle, lower oil prices and reforms news-flow" but hereon, actual earnings and macro data points would matter increasingly, UBS said adding that "The revised target also reflects our view of the growth recovery being slower-than-expected, as is playing out in quarterly corporate results."
IT shares were at the receiving end after software giants, TCS, Wipro and Infosys announced muted Q4 results.
Coming week will be dictated by the next batch of Q4 corporate results and key global central bank meetings, a broker said.
Market is now eager to know whether Government will be able to pass GST and Land Bills in both Lok and Rajya Sabha in coming days, brokers said.
Of 30-share Sensex pack, 28 counters finished with losses while only Tata Steel and TCS closed with gains.
Wipro was the top loser with a fall of 10.82 percent followed by Sun Pharma 8.63 percent, Infosys 8.51 percent, Cipla 6.25 percent, Hindalco 6.12 percent, SBI 5.29 percent, RIL 5.12 percent, GAIL India 5.04 percent, HUL 5.01 percent, NTPC 4.97 percent, Dr Reddy's 4.53 percent, HDFC 4.43 percent, M&M 4.40 percent, ONGC 4.27 percent, Tata Motors 3.72 percent, L&T 3.60 percent, Bajaj Auto 3.33 percent, Tata Power 3.29 percent, SSLT 2.64 percent and Hero MotoCorp 2.45 percent.
Among the BSE sectoral indices, realty plunged by 7.69 percent, IT 5.76 percent, teck 5.23 percent, healthcare 4.87 percent, Auto 4.45 percent, oil&gas 4.33 percent, consumer goods 4.22 percent and power 4.14 percent.
The total turnover at the BSE and NSE was higher at Rs 19,165.33 crore and Rs 1,16,053.12 crore from Rs 14,006.33 crore and Rs 73,151.16 crore, respectively.
