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Shares fall for 3rd session; rupee gains

Comments / {{hitsCtrl.values.hits}} Views / Saturday, 7 December 2019 00:01

REUTERS: Shares closed weaker for third straight session on Friday, weighed down by foreign sell-offs and profit-taking, while the rupee ended firmer.

The rupee rose 0.17% to 181.10/30 per dollar, compared to Thursday’s close of 181.40/50, Refinitiv data showed. It is up 0.8% so far this year.

The benchmark stock index closed down 0.18% at 6,149.57, its lowest since 27 November. The bourse fell 1% last week, and is up 1.61% for the year.

The index touched its highest level since 25 June 2018 on Monday, lifted by hopes of booming economic activity after the new Government last week cut some key taxes.

Analysts said the recent tax reduction has already been factored in and the market was waiting to see the impact of the new policy. They said investors sold shares that rose on hopes the new Government will encourage an economic boom led by construction.

The Government on 27 November reduced value-added tax to 8% from 15% starting 1 December, and abolished some other taxes as well in its attempt to boost economic growth that has fallen to a near two-decade low.

Emerging Asia Economics, in a note on Monday, said the tax cut decision would provide a significant boost to the economy, but put increased strain on the country’s fragile public finances, with a possible loss of $2 billion in revenue.

Foreign investors were sellers on Friday in the equity market for the 27th session out of last 30.

They sold a net Rs. 86 million ($477,778) worth of shares on Friday, extending the year-to-date foreign outflow to Rs. 10.9 billion, according to index data.

Equity market turnover was Rs. 404.3 million, less than this year’s daily average of about Rs. 727 million. Last year’s daily average was Rs. 834 million.

Foreign investors were net sellers of government securities on a net basis for the first week in seven, selling a net Rs. 4.2 billion worth of government securities in the week ended 4 December.

Total foreign outflows from government securities through 27 November stood at Rs. 47.9 billion, according to Central Bank data.

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