The capital gains tax claims on foreign funds with retrospective effect and worries over similar notices ahead hit the marked mood during the week ended Friday, sending a key index down to its lowest level in three-and-a-half months.
The mixed corporate results for the last quarter of the previous financial year that saw better-than-expected performance by heavyweights such as Reliance Industries but muted earnings growth in several others, notably Wipro, HCL and Infosys, also had a bearing on the sentiments.
Together with the forecast of below-normal rainfall during this year's monsoon season, the market sentiment pulled down the 30-share sensitive index of the Bombay Stock Exchange (BSE) to its lowest level since Jan 13, after opening on a weak note.
The index not only fell below the psychologically important level of 28,000-points mark, but also registered a decline in four out of the five trading sessions duing the week under review, data with the exchange showed.
The key index finally ended 3.53 percent lower, while another broader index of the National Stock Excange, the 50-share, Nifty fell 3.49 percent. The Mumbai bourse's mid-Cap index also fell 3.12 percent, while that for small-Cap stocks declined 5.27 percent.
"Payment of minimum alternate tax by foreign portfolio investors continued to weigh on sentiments even as the finance ministry said minimum alternate tax will not be applicable to entities based in countries with double taxation avoidance pacts with India," said brokerage Sharekhan.
The nervousness of foreign funds was evident. On each of the four days the Sensex fell, these funds were net sellers of equity in exchanges -- to the extent of $107.11 million and $231.42 million on Monday and Tuesday, and $134.03 million and $44.58 million on Thursday and Friday.
To map the appetite of foreign funds with market movements, the Sensex fell 1.95 percent and 0.75 percent on Monday and Tuesday, respectively, and 0.56 percent and 1.07 percent on Thursday and Friday.
The only day it ended higher was Wednesday, up 0.77 percent, when foreign funds were net buyers worth $2.59 billion.
The losses were also broad-based. Al the 12 sector-specific indices of the Mumbai bourse ended in the negative territory, led by that for realty, which was down as much as 7.69 percent, followed by those for information, down 5.76 percent, and technology, down 5.23 percent.
Among the top gainer during the week was Tata Steel, up by 9.71 percent, while the state-run Bharat Heavy Electricals also closed higher by 0.86. Among the losers, Wipro fell 13.08 percent and Sun Pharmaceuticals was down 12.92 percent.
