Weekly Wrap: Dalal Street Snaps Losing Streak After Tax Surcharge Rollback Optimism Soothes Nerves
Indian equity benchmarks halted their four-week losing streak, their longest in over 10 months, after talks of a likely rollback of a surcharge on foreigners helped calm nerves in a market struggling with a slowing economy.
The S&P BSE Sensex ended the week 1.25 percent higher at 37,581 and the NSE Nifty 50 closed 1.02 percent higher during the period at 11,109.
The markets are expected to witness positive news flow in the near term, according to Kotak Securities’ Senior Vice President and head of fundamental research Rusmik Oza.
“We’re expecting major announcements by the government next week. Any announcements on LTCG (long-term capital gain) tax and waiving off surcharge on FPI tax will help sentiment,” he told BloombergQuint in an interaction.
Oza said he expects the Nifty to touch 11,500-11,600 in the next two-to-three weeks.
Foreign portfolio investors sold more than Rs 6,000 crore of stocks during the week, according to data from NSDL and provisional numbers put out by the NSE.
They have sold stocks worth over Rs 19,000 crore since the Budget where Finance Minister Nirmala Sitharaman increased the tax on super-rich, including snarled foreign portfolio investors and alternative investment funds, that plough funds through non-corporate structures or trusts.
Eight out of 11 sectoral gauges compiled by National Stock Exchange ended higher, led by the NSE Nifty Auto Index’s 2.9 percent gain. On the flipside, the NSE Nifty Metal Index was the top sectoral loser, down 2.48 percent.
How The Broader Markets Performed
The broader markets represented by the NSE Nifty 500 Index ended 1.15 percent higher, led by Jet Airways (India) Ltd., Jammu & Kashmir Bank Ltd. and IFB Industries Ltd.
How Currency Markets Performed
The Indian rupee was the worst performer among Asian currencies this week. The home currency depreciated 1.7 percent to end the week at 70.79 against the greenback.
Big Talking Points This Week
- Modi government moves to amend Article 370, create two union territories—Jammu & Kashmir, Ladakh.
- DHFL’s draft resolution plan seeks moratorium, fresh funds for lending.
- Sushma Swaraj Death: Tributes pour in from across the political spectrum.
- Pakistan downgrades diplomatic ties with India, suspends bilateral trade.
- Monetary Policy: MPC springs surprise with 35-basis-point rate cut.
- Prime Minister Narendra Modi says Jammu & Kashmir’s Union Territory status won’t be needed for long.
- Inflows into equity mutual funds rise for third straight month in July.
Key Earnings Announced This Week
Key Events/Data To Watch Next Week
- Aug. 9: Reliance Industries Ltd.’s Annual General Meeting
- Aug. 13: CPI Inflation data for July
- Aug. 13: India trade data for July
- Aug. 14: India July Wholesale Inflation.