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Sensex, Nifty Stage Worst Day In Two Weeks As Tax On Super Rich Stays

The Sensex fell 560 points or 1.44 per cent to close at 38,337 and the NSE Nifty 50 Index dropped 1.53 per cent or 178 points to settle at 11,419.

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Sensex, Nifty Stage Worst Day In Two Weeks As Tax On Super Rich Stays

The S&P BSE Sensex and NSE Nifty 50 Indexes witnessed a sharp selloff in today's session and fell close at their worst levels since mid-May as the investor sentiment was hurt after the Finance Bill for current financial year was passed in the parliament on Thursday without any amendments. Passing of Finance Bill without amendments meant that the higher tax surcharge proposed for super rich in the budget was not rolled back as requested by the association of foreign portfolio investors. The benchmarks registered their worst single day decline since July 8.

The Sensex fell 560 points or 1.44 per cent to close at 38,337 and the NSE Nifty 50 Index dropped 1.53 per cent or 178 points to settle at 11,419.

"Finance Bill has been passed in Parliament without any significant change. Normally a lot of amendments happen when it goes to debate," AK Prabhakar, head of research at IDBI Capital, told NDTV.

"Somebody investing from abroad has a lot of choices and higher taxes make India a less lucrative to investment destination," Mr Prabhakar added.

Whatever hopes there were around the finance minister removing the surcharge on foreign investors have been dashed, Neeraj Dewan, a director with Quantum Securities, New Delhi told Thomson Reuters.

Foreign portfolio investors have been selling shares in Indian markets after the Budget was announced on July 5 and till Thursday they had sold shares worth Rs 1,983.82 crore, data compiled NSDL showed.

Selling pressure in today's session was broad-based as all the 19 sector gauges compiled by National Stock Exchange ended lower led by the Nifty Auto Index's 3.3 per cent fall. Financial Services, Bank, PSU Bank, Private Bank, Pharma and PSU Bank sector gauges also dropped between 1.9 and 2.5 per cent each.

Mid- and small-cap shares also witnessed selling pressure as the Nifty Midcap 100 Index dropped 2.15 per cent and the Nifty Smallcap 100 Index slumped 1.8 per cent.

Mahindra & Mahindra, Bajaj Finance, Bajaj Finserv, Eicher Motors, IndusInd Bank, Yes Bank and Indiabulls Housing Finance were among the top Nifty losers, down between 3.5 and 4.2 per cent each.

On the flipside, NTPC, Titan, Coal India, TCS and Power Grid were among the notable gainers in the Nifty.

RBL Bank Ltd plunged 13.7 per cent to its lowest close since October 29 after the lender highlighted risks to its asset quality, despite reporting a 41 per cent jump in quarterly profit.

The overall market breadth was negative as 1,347 shares ended lower while 425 closed higher on the National Stock Exchange.

(With inputs from Reuters)



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