Mumbai: A continuous slide in the Chinese markets, strain in US stocks and uncertainty over the recommendations on retrospective tax subdued investor sentiments in the Indian equity markets during the late-afternoon trade session on Thursday.
Bearish sentiments were seen to rule on the S&P Bombay Stock Exchange (BSE) with its barometer 30-scrip sensitive index (Sensex) plunging 310 points -- or 1.11 percent.
Similar negative sentiments were witnessed at the wider 50-scrip Nifty of the National Stock Exchange (NSE) which drowned 117 points or 1.37 percent at 8,378.60 points.
The S&P BSE Sensex, which opened at 27,959.19 points, trading at 27,621.96 points (at 2.45 p.m.)-- down 309.68 points or 1.11 percent from the previous day's close at 27,931.64 points.
The Sensex touched a high of 27,964.60 points and a low of 27,574.94 points in the intra-day trade so far.
Analysts point out that weak global cues coupled with uncertainty over the government's retro-tax committee's report dampened the Indian markets. The negative bias washed-out healthy macros like announcements about new banks licenses and global slide in commodity prices, especially crude oil.
The most significant downside for the day eminated from US and Chinese markets.
"The US and Chinese markets have been under strain. Today the Chinese markets continued its downward movement despite various measures taken by the government there. This shows that the problem is deep rooted and the impact might be much greater. This fact unnerved Indian investors," Anand James, co-head, technical research, Geojit BNP Paribas, told IANS.
Concerns have grown over the Chinese markets, that various efforts by the government, brokerage firms and mutual funds are not able to arrest the fall.
Some estimates point out that the continuous slide in the exchanges of the $10-trillion strong economy has wiped off 40-45 percent of the entire stock value in the last three months.
The markets are also anxious to known the government's position on the recommendations made by the Justice A.P.Shah committee on minimum alternate tax (MAT) .
The MAT issue on capital gains tax is expected to impact the margins of foreign funds. This might impact the inflows from the Foreign portfolio investors (FPIs) into Indian stock markets.
Sector-wise, all 12 indices of the BSE except for fast moving consumer goods (FMCG) and healthcare stocks were trading in the red.
The S&P BSE FMCG index rose by 97.90 points and healthcare index gained by 93.75 points.
On the other hand, the S&P BSE banks index plunged by 503.85 points, automobile index receded by 351.28 points, capital goods index declined by 304.39 points, information technology (IT) index lost 271.38 points and metal index dropped by 156.81 point.
