MUMBAI: Markets suffered from ‘the morning after budget effect’ with bourses seeing a bloodbath on Friday. Benchmark Sensex booked its worst rout in over two years with the 30-share index plummeting 840 points — its biggest single-day slump since August 24, 2015. The broader NSE Nifty, too, crashed about 250 points before closing at the 10,800-mark. Intra-day, it hit a low of 10,736.10.
On a weekly basis, Sensex and Nifty declined by 2.72 and 2.79 per cent respectively, snapping their eight-week-long winning streak.
Friday’s carnage, triggered by budget proposals taxing equities torpedoed investor sentiment resulted in a wealth erosion of over Rs 4.5 lakh crore as stocks went into a free-fall. The budget proposals sought to re-introduce the long-feared, long-term capital gains tax of 10 per cent on equities from next year.
Besides, investors were also told to pay another 10 per cent tax on distributed income from equity-oriented mutual funds. Adding fuel to fire, Fitch Ratings said the government’s high debt burden constrains India’s sovereign rating upgrade. Global markets, too, traded in the red owing to inflation fears and rising US bond yields.
“This seemed to have become a bull-trap as the index opened lower and continued its selling streak throughout the remaining part of the day. Eventually, the intimidating session ended with a massive cut of 2.33 per cent, posting its biggest single-day fall in percentage terms after 14 months,” said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.
All the sectoral indices ended in the red with BSE realty plunging 6.28 per cent, followed by infrastructure, power, capital goods, auto, consumer durables and finance. Bajaj Auto was the worst performer on Sensex falling 4.90 per cent, followed by Bharti Airtel at 4.62 per cent. Other losers include Axis Bank, Maruti Suzuki and Reliance Industries.
Really walking the pre-modi govt talk?
Call to raise I-T ceiling to Rs 5 Lakh
In the run-up to the 2014 LS polls, Jaitley on April 20, 2014, had in Amritsar demanded that income tax ceiling be raised from Rs 2 lakh to Rs 5 lakh. That, he said, would help 3 crore people save Rs 24 crore and have a small impact on tax revenue
Did enough in the past: FM
On Friday, Jaitley said his government has done “enough” for the middle-class in the past. Here’s what he did: Raised I-T cap to Rs 2.5 lakh; cut tax rate on Rs 2.5-5 lakh bracket to 5%; reduced rebate for income up to Rs 3.5 lakh. What about Rs 5 lakh exemption slab?
TNIE report dated Dec 26, 2016 speech was misinterpreted, Jaitley had emphasised. A year later, he brought in long-term capital gains tax, saying now the market has matured.
No, last year.
Yes, this time
Ahead of last year’s General Budget, Arun Jaitley had in Dec 2016 rubbished the buzz on introducing long-term capital gains tax. He was reacting to speculation after Modi had said, “Those who profit from the financial markets must make a fair contribution to nation-building through taxes.”