India’s benchmark equity index fell as investors rearranged their funds before a tax on equity gains kicks in from April 1.
The benchmark Sensex index fell 0.76%, or 252.88 points, to 32,923.12. So far this year, it has declined 3.5%.
Tata Steel and Bharti Airtel were the worst performers, each falling 4%. The gauge on Friday completed three weeks of declines, its longest run of weekly losses since November 2016.
All 19 sub-indexes compiled by BSE retreated, led by a measure of telecom companies. The sector’s profitability is expected to remain under pressure for another 12 months as operators aim to acquire market share, Piyush Nahar and Somshankar Sinha, analysts with Jefferies India said in a note.
“We see the market consolidating,” said Jitendra Panda, managing director at Peerless Securities in Kolkata. “As the local funds are selling, the index will gradually drift lower as portfolio reshuffling and weak local and global cues mean investors will sell at every rise.”
Profit exceeding Rs100,000 ($1,538) from shares held for more than a year will be taxed at 10% from April 1, Finance Minister Arun Jaitley said in his budget last month. Until then, gains from equity investments held for more than 12 months are exempt from tax. 
Meanwhile the rupee yesterday weakened to a four-month low against the US dollar after the country’s current account deficit widened sharply, driven by higher imports. Moreover, losses in local markets for fifth consecutive sessions also dampened sentiments.
The home currency closed at 65.18 a dollar – a level last seen on November 16, 2017, down 0.36% from its Friday’s close of 64.94. The rupee opened at 65.04 a dollar and touched a low of 65.18.
So far this year, the rupee has fallen 1.8%, while foreign investors have bought $1.35bn in equity and sold $317.10mn in debt market.
The current account deficit for the December quarter widened to 2% of the gross domestic product, or $13.5bn, up from 1.4%, or $8bn, in the corresponding period a year ago, Reserve Bank of India (RBI) data showed on Friday.
Traders are now looking forward to Wednesday’s Federal Open Market Committee meeting for guidance on the US Federal Reserve’s rate hike path.
The 10-year bond yield closed at 7.607% compared to its previous close of 7.557%. Bond yields and prices move in opposite directions. Asian currencies were trading lower. South Korean won was down 0.45%, Taiwan dollar 0.21%, Malaysian ringgit 0.19%, Philippines peso 0.16%, Indonesian rupiah 0.09% and China offshore fell 0.07%. However, Japanese yen was up 0.19% and Thai baht 0.1%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 90.278, up 0.05% from its previous close of 90.233.