Nifty sheds 256 pts, ends below 10800-mark on Budget woes

Javier Stokes
February 3, 2018

The flagship Sensex nosedived by 766.09 points to quote at 35,080 points in pre-close session with all the sectoral indices trading in the negative zone. Sentiment also took a hit after the fiscal deficit target for 2017-18 was raised to 3.5 per cent of GDP as against 3.2 per cent earlier.

Similarly, the NSE Nifty moved up 49.70 points, or 0.45 per cent, to 11,077.40. On January 21, 2008, BSE Sensex had fallen by 1408.35 whereas on October 24, 2008 it had gone down by 1070.63 points.

A day after the reintroduction of the long-term capital gains (LTCG) tax, coupled with weak global cues, bears roared loud on Dalal Street on Friday.

The S&P BSE Sensex slid 2.3% or 840 points while the NSE Nifty50 ended the day with 256.30 points or 2.33%. The Budget has proposed an LTCG tax on equity instruments on all capital gains exceeding ₹1 lakh at the rate of 10%, without offering any indexation benefit that allows gains to be set off against inflation.

The real pain from Finance Minister Arun Jaitley's Union Budget showed up in the domestic equity market on Friday, with the benchmark Sensex tanking 839 points, or 2.34 per cent, to log the biggest one-day fall in more than 15 months. "Volatility in bonds and rupee over fiscal slippage and stocks' churn ahead of FY19 over LTCG prompted sharp pull back in stocks". The upward revision of fiscal deficit targets for the current financial year and the next also spooked investors.

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Among the 30-share basket, 27 stocks ended with losses led by Bajaj Auto and Bharti Airtel.

Bucking the trend, Kotak Mahindra Bank, RIL, HDFC Ltd, IndusInd Bank, Tata Motors, Yes Bank, Asian Paints and ICICI Bank finished with gains.

The S&P BSE Realty Index's was dragged to a low of 6.3%.

The small- and mid-cap stocks were hammered badly as many of them had risen too fast with their business fundamentals failing to keep pace with valuations.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 per cent and away from a record high.

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