India Stocks: Indian shares fall for third week on STT hike on derivatives, banking concerns

Aditya Birla Sun Life Amc

24/03/2023 10:25

(Updates closing levels, adds analysts' comments)
    By Bharath Rajeswaran
       BENGALURU, March 24 (Reuters) - Indian shares extended
losses for the third consecutive week as investors turned
cautious after the government hiked securities transaction tax
(STT) on futures and options contracts, while lingering concerns
of contagion in the global banking sector weighed. 
    The Nifty 50 index  .NSEI  closed 0.77% lower at 16,945.05.
The S&P BSE Sensex  .BSESN  fell 0.69% to 57,527.10. Both the
benchmarks logged weekly losses of nearly 1%.    
 
   All 13 of the major sectoral indexes declined, with the
heavyweight financials index  .NIFTYFIN  losing 0.69%. Forty-one
of the Nifty 50 constituents fell on Friday.
    "There is lack of buying across the spectrum," said Saurabh
Jain of SMC Securities. 
    "In a sideways market with a negative bias, one finds very
few avenues of solace, with only 25% of stocks rising."
    The benchmarks traded marginally lower for most of the
session before sliding sharply in the final two hours. The slide
came after the government hiked the STT on futures and options
contracts, effective April 1.
        Income from trading in derivatives is a capital gain for
foreign investors, analysts said. "Some foreign investors may
trade less in derivatives and some trading could shift out of
India as well,” said Shyam Sekhar, chief ideator and founder,
iThought, a Sebi-registered investment advisory firm.
  
        Traders are taking a "cautious approach" as they await
further clarity from the finance ministry, said Rahul Sharma,
market strategist and head of research at Equity99.
  
        Besides, shares of asset management companies also fell
on Friday after the finance minister 
    announced
     amendments to the Finance Bill to treat returns on debt
mutual funds as short-term capital gain, which is likely to
eliminate the long-term tax benefits on such investments.
  
    "As an asset class, debt mutual funds will get less
attractive. Fixed deposits in banks may become more popular,"
said Amit Kumar Gupta, founder and chief investment officer at
Delhi-based equity research firm Fintrekk Capital.
    HDFC Asset Management Co  HDFCA.NS , UTI AMC  UTIA.NS  and
Aditya Birla Sun Life AMC  ADIE.NS  lost 4% each.  urn:newsml:reuters.com:*:nL4N35W15J
    Biocon fell 4% after some analysts flagged pricing concerns
for some of the company's insulin biosimilars in the United
States.  urn:newsml:reuters.com:*:nL4N35W1FD
   

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Nifty extends losses for the third week in a row    https://tmsnrt.rs/40dAVEO
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 (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio
D'Souza, Nivedita Bhattacharjee and Dhanya Ann Thoppil)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463))