Sensex, Nifty close lower on profit taking in banks after budget, fall for 4th day

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% 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% to 79,750.51.

The NSE Nifty dropped 65.55 points or 0.27% to 24,413.50.

From the Sensex pack, Bajaj Finserv declined by 2% 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% 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 biassed 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. However, markets ended off their lows on selective buying support although concerns of higher valuations continue to weigh," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Analysts said that the ongoing Q1 results, which to date are muted, will decide the near-term trend.

"Nifty fell for a fourth consecutive session on Wednesday, logging its worst streak since May 2024," said Deepak Jasani, Head of Retail Research, HDFC Securities.

In the broader market, the BSE smallcap gauge jumped 1.91% and midcap index climbed 0.68%.

Among the indices, banks, financial services and auto were the laggards.

Energy, healthcare, industrials, utilities, telecommunication and power were among the gainers.

Key benchmark indices ended marginally lower in volatile trade on Tuesday as the government proposed to hike the securities transaction tax on futures & options in the Budget for 2024-25.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled lower. European markets were trading lower. The US markets ended marginally lower on Tuesday.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹2,975.31 crore on Tuesday, according to exchange data.

Global oil benchmark Brent crude jumped 0.75% to $81.62 a barrel.