Profit booking weighs on key indices

Mumbai: Extending the losing streak to the fourth day, benchmark BSE Sensex declined by 280 points on Wednesday due to profit booking in financial and banking shares after the government announced a hike in securities transaction tax and short term capital gains tax in the budget for 2024-25.

The 30-share BSE Sensex declined 280.16 points or 0.35 per cent to settle at 80,148.88 with 19 of its components closing lower and 11 with gains. During the day, it tumbled 678.53 points or 0.84 per cent to 79,750.51. The NSE Nifty dropped 65.55 points or 0.27 per cent to 24,413.50. From the Sensex pack, Bajaj Finserv declined by 2 per cent after its first-quarter earnings failed to cheer investors. Bajaj Finance, Hindustan Unilever, Kotak Mahindra Bank, Adani Ports, Axis Bank and State Bank of India were the other big laggards. However, Tech Mahindra, ITC, NTPC, Tata Motors and Sun Pharma were among the gainers.

Conglomerate ITC surged to 52-week highs before closing higher by 0.42 per cent in its second straight day of gains after the budget proposed no new tax on tobacco products. "The budget event has gone by leaving a mixed bias while reshuffling of capital gain tax is only a short-term negative surprise. The broad market seems to be losing momentum due to lack of further traction," Vinod Nair, Head of Research, Geojit Financial Services said.

Nair added that domestic investors are biased, but strong government fiscal and growth policy is attractive for FIIs, which will help to hold the ground. The recovery noticed from today's low will be evident only post the monthly expiry on Thursday. "Profit-taking continued as investors cut their position in banking and automobile stocks, which led to a fall in key benchmark indices.