Sensex Slips Below 25,000 Amid Selloff in ITC, Infosys Shares
The BSE Sensex is on track for a fourth straight fall on Monday amid a sharp selloff in index heavyweight stocks such as ITC and Infosys. These two stocks have a combined weightage of around 15 per cent on the Nifty.
ITC shares fell over 5 per cent amid speculation that the Modi government will double the excise duty on cigarettes. Kaustubh Pawaskar, FMCG analyst at Sharekhan said the proposed excise duty hike will put pressure on cigarette sales.
Infosys, which traded with over 2.5 per cent cut, was among the top Nifty losers today. Kotak Mahindra Bank, down 4 per cent, and United Spirits, down 3 per cent, were some of the other big losers today.
The BSE’s Oil & Gas sub-index, which has fallen sharply over the last few days, traded flat even as brent prices rose above $115 a barrel on Monday.
Two-wheeler maker Hero MotoCorp, state-run BHEL traded with over 2 per cent gains. Metal stocks such as Jindal Steel and Power gained on hopes of better demand after a preliminary HSBC survey showed activity in China’s factory sector expanded in June for the first time in six months as new orders surged.
Sugar stocks gained after Food Minister Ram Vilas Paswan said the government will increase import duty from 15 per cent to 40 per cent.
Despite the correction, investors remain bullish about markets. The government’s decision to hike rail passenger fares have been viewed positively and analysts say hopes of a reform-oriented budget have gone up.
“We feel that, a progressive budget as well as other reform initiatives will likely lead to continued outperformance of Indian indexes versus emerging market peers,” said Dipen Shah, head of private client group research, Kotak Securities.
However, a continued rise in crude oil prices would be negative for India’s current account, rupee and inflation, Mr Shah added.
As of 1.25 p.m., the Sensex traded 147 points lower at 24,958, while the Nifty was down 47 points at 7,465.