Sensex tanks 2.5%, down 839 pts, Nifty ends below 10,800 on Budget woes

Benchmark indices tumbled on Friday as the long-term capital gains tax on equities investments dampened sentiment, while bonds slid for a second consecutive session on worries the central bank would become more hawkish on inflation.

The weak sentiment came a day after the government unveiled its budget for the year starting in April that raised spending for rural sectors and healthcare, widening the fiscal deficit target to 3.3% of gross domestic product from the previous 3.0%. The government also unveiled a 10 percent tax on long-term capital gains in equity markets.

Investors worried that higher spending and the government’s move to raise minimum support prices for crops could lead to higher retail prices at a time when consumer price inflation has already hit a 17-month high of 5.21%, well above the Reserve Bank of India’s target of 4%.

BHEL, Bajaj Auto, Bajaj Finance and Tata Power lost the most on both indices, while TCS, Wipro, Tech Mahindra, and HCL Tech were the top gainers.

Two-and three-wheeler major Bajaj Auto reported lower than expected net profit for the December quarter at Rs 9.52 billion against Rs 9.24 billion year on year. The company’s revenue rose 26% at Rs 63.69 billion against Rs 50.67 billion year on year. At the operating level, the earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to Rs 12.31 billion against Rs 10.43 billion.

LIC Housing Finance, Cummins India, DCM Shriram Industries, Indo Count Industries, Vivimed Labs and Wim Plast were among 29 stocks from the S&P BSE500 and S&P BSE Smallcap index hitting their respective 52-week lows after the indices fell on Friday. Shares of five public sector banks such as Allahabad Bank, Bank of Maharashtra, Corporation Bank, Punjab & Sind Bank and United Bank of India too hit 52-week lows on BSE.

Consumer durables firm Whirlpool of India today reported a 4.14 per cent fall in standalone net profit to Rs 53.14 crore for the December quarter. The company had posted a net profit of Rs 55.44 crore during the same quarter a year ago. Its total income during the quarter under review stood at Rs 979.26 crore. It was at Rs 919.89 crore in the corresponding period of the last fiscal.

Aluminium major Hindalco Industries has reported profit growth of 17.2 percent year-on-year at Rs 375 crore for December quarter, driven by copper business. Profit for quarter ended December 2016 stood at Rs 320 crore, the company said. Standalone revenue during the quarter grew by 18.4 percent to Rs 11,023 crore compared to Rs 9,314 crore in year-ago. Operating profit in Q3 increased 10.7 percent to Rs 1,312 crore and margin contracted 80 basis points to 11.9 percent compared to same quarter last year.

PC Jeweller crashed nearly 60 percent in morning following further correction in Vakrangee wherein the company holds some stake, but post the management clarification saying there is no business interest with the IT firm, the stock recovered half of losses to trade lower by 30 percent. Investors in Vakrangee, which was locked at lower circuit for third consecutive session today, were spooked as reports indicated that the company is facing a probe from SEBI for alleged stock price and volume manipulation.

Here are some picks from the week gone by.

Company: Zee Entertainment CMP: 582.00 Mastermind

Company: ONGC Ltd. CMP: 192.45 Mastermind

Company: NOCIL Ltd. CMP: 185.00 Mastermind

Company: Tata Power CMP: 84.80 Mastermind

Company: Tata Steel CMP: 668.85 Mastermind

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