Mumbai: The BSE Sensex pared most of its losses to end modestly lower on Friday, pressured by a sharp decline in index heavyweight Reliance Industries after the government imposed an export tax on petroleum products.
The 30-share benchmark dived over 900 points in early trade, but clawed back lost ground on fag-end buying. It finally ended 111.01 points or 0.21 per cent lower at 52,907.93, marking its third straight day of loss.
On similar lines, the broader NSE Nifty dipped 28.20 points or 0.18 per cent to 15,752.05.
The government on Friday slapped an export tax on petrol, diesel and jet fuel (ATF) while also joining nations like the UK in imposing a windfall tax on crude oil produced locally.
The export tax is to deter companies such as Reliance Industries and Rosneft-based Nayara Energy from preferring overseas markets over domestic supplies.
The levy on crude, which follows record earnings by state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) and private sector Cairn Oil & Gas of Vedanta Ltd, alone will fetch the government over Rs 7,000 crore annually on about 30 million tonnes of crude oil produced domestically.
Reliance Industries was the top laggard in the Sensex pack, dropping 7.14 per cent, followed by PowerGrid, NTPC, Bharti Airtel, Maruti, Sun Pharma, ICICI Bank and Dr Reddy’s.
ITC topped the gainers’ chart with a jump of 3.99 per cent. Bajaj Finance, Bajaj Finserv, Asian Paints, HUL, HDFC and Nestle India were among the other major winners.
“Unfavourable cues from the domestic market led to a weak start due to weakness in the rupee and selling in oil refineries as the government imposed an additional export duty on petrol and diesel.
“Adding to the weakness, India’s factory output growth slowed down during June, as high inflation continued to dampen demand,” said Vinod Nair, Head of Research at Geojit Financial Services.
On a weekly basis, the Sensex rose 179.95 points or 0.34 per cent, while the Nifty gained 52.80 points or 0.33 per cent.
“Market is expected to remain volatile due to a slew of market-moving events. On the macroeconomic front, investors will be watching FOMC minutes to see where the economy is headed. Furthermore, global markets would be influenced by China’s inflation figures, which are due next week.
“Back home, the first quarter of fiscal year 2023 earnings season will drive market sentiment and stock-specific actions,” said Yesha Shah, Head of Equity Research, Samco Securities.
In the broader market, the BSE midcap and smallcap indices managed to settle in the green, rising 0.67 per cent and 0.09 per cent, respectively.
Among the BSE sectoral indices, energy tumbled 3.99 per cent, followed by oil & gas (3.21 per cent), utilities (0.86 per cent), power (0.77 per cent) and telecom (0.36 per cent).
FMCG index jumped 2.47 per cent. The other gainers were basic materials, consumer discretionary goods & services, finance, healthcare, information technology and realty.
Elsewhere in Asia, markets in Tokyo, Seoul and Shanghai ended lower.
European bourses were trading in the green in mid-session deals. The US markets had ended lower on Thursday.
Meanwhile, international oil benchmark Brent crude jumped 1.90 per cent to USD 111.1 per barrel.
The rupee rebounded from its all-time low to close 12 paise higher at 78.94 (provisional) against the US dollar on Friday.
Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 1,138.05 crore on Thursday, as per exchange data.
