Stock Markets Extend Decline as Banking Shares Sell Off; STT Hike Adds Pressure

Market Indices Drop for Fourth Consecutive Day Amid Investor Caution

Mumbai, Jul 24 2024 :  The benchmark BSE Sensex continued its downward trend for the fourth consecutive session on Wednesday, primarily driven by selling in financial and banking stocks. The market sentiment was further dampened by the government’s decision to increase securities transaction tax (STT) and short-term capital gains tax.

The 30-share BSE Sensex ended the day lower by 280.16 points, or 0.35 percent, settling at 80,148.88. Earlier in the day, it had plummeted by 678.53 points, or 0.84 percent, touching an intraday low of 79,750.51. The NSE Nifty also witnessed a decline, closing down by 65.55 points, or 0.27 percent, at 24,413.50.

Key losers from the Sensex included Bajaj Finserv, which fell by 2 percent following disappointing first-quarter earnings. Other major laggards were Bajaj Finance, Hindustan Unilever, Kotak Mahindra Bank, Adani Ports, Axis Bank, and State Bank of India.

However, stocks like Tech Mahindra, ITC, NTPC, Tata Motors, and Sun Pharma managed to record gains during the session.

ITC, in particular, surged to a 52-week high amid positive investor sentiment after the budget announcement spared tobacco products from new taxes.

Vinod Nair, Head of Research at Geojit Financial Services, commented, “The market sentiment remains mixed post-budget, with the reshuffling of capital gain taxes presenting a short-term negative surprise. Broad market momentum appears subdued due to lack of further catalysts.”

Meanwhile, global markets showed a similar trend with Asian markets closing lower and European markets also trading in the red. In the US, markets ended marginally lower in the previous session.

Foreign Institutional Investors (FIIs) continued to sell equities on Tuesday, offloading stocks worth Rs 2,975.31 crore, according to exchange data.

On the commodities front, global oil benchmark Brent crude rose by 0.75 percent to trade at USD 81.62 per barrel.

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