Sensex tanks 176 points as Mauritius tax treaty rattles investors
The Sensex retreated from a two-week high after falling 175.51 points to 25,597.02 as foreign funds cut down their exposure over fears that equity inflows would take a hit after India's move to impose capital gains tax on investment through Mauritius.
Mumbai: The Sensex retreated from a two-week high after falling 175.51 points to 25,597.02 as foreign funds cut down their exposure over fears that equity inflows would take a hit after India's move to impose capital gains tax on investment through Mauritius.
Retail participation, however, was positive with the BSE mid-cap rising 0.17 per cent and small cap index falling by a marginal 0.03 per cent.
Dealers said caution in bluechips was also seen ahead of macroeconomic data IIP numbers for March and consumer price index (CPI) for April slated to be released tomorrow.
The Sensex after opening down at 25,548.97 slided to a low of 25,409.24. However, value-buying in several bluechips helped trim losses and the index finally settled 175.51 points or 0.68 per cent lower at 25,597.02. The gauge had gained 544 points in the past two sessions.
"The apprehension over tax on capital gains made through P-Notes (Mauritius) has negatively impacted the market. The short-term investments from FIIs may get hurt in the near- term," said Vinod Nair Head of Research at Geojit BNP Paribas Financial Services.
Besides, a mixed trend in regional markets and Europe, which fell towards a one-month low on drop in crude oil prices, also hit trading sentiment here.
India will begin imposing capital gains tax on investments routed through Mauritius from April next year under a revised tax treaty to curb tax evasion and round-tripping of funds -- a move that may have a significant bearing on capital flows from the island nation.
The 50-share Nifty also succumbed and after breaking below the crucial 7,800-mark in early trade hit a low of 7,780.90 before recovering partially to close 38.95 points or 0.49 per cent at 7,848.85.
Among other Asian markets, Japan's Nikkei ended 0.08 per cent higher while China's Shanghai Composite ended 0.16 per cent higher. Hong Kong's Hang Seng closed 0.93 per cent down.
European shares slipped as some weak earnings pushed the market lower after two previous days of gains. Key indices, like France, Germany and the UK fell between 0.23 per cent and 1.03 per cent.
Back home, out of the 30-share Sensex, 23 scrips fell. Major losers were Bharti Airtel (2.55 pc), SBI (2.30 pc), Tata Motors (2.26 pc), Dr Reddy's (2.02 pc), BHEL (1.87 pc), ITC (1.64 pc), Lupin (1.33 pc), HDFC (1.22 pc), ONGC (1.18 pc), Bajaj Auto (1.10 pc) and Infosys (0.95 pc).
However, Axis Bank rose by 2.16 per cent, followed by Maruti Suzuki 1.12 per cent, Asian Paints 0.97 per cent, L&T 0.41 per cent and Tata Steel 0.32 per cent.
Among BSE sectoral and industry indices, telecom fell by 2.34 per cent, realty 0.88 per cent, power 0.75 per cent, IT 0.72 per cent and teck 0.65 per cent.
The market breadth remained negative as 1,462 stocks ended lower, 1,097 closed higher while 160 ruled steady. The total turnover rose to Rs 2,574.47 crore from Rs 2,349.59 crore yesterday.
Market Roundup: Sensex drops nearly by 600 points, Nifty closes at 15,752; today's top gainers and losers
At the closing bell, Sensex went down by a whopping 586 points and was at 52,533.40. On the other hand, Nifty ended at 15,752.40 after decreasing by 1.07 percent
The top gainers at BSE inlcuded ICICI Bank, HDFC and Axis Bank, while HCL Technologies, Dr Reddy's and Maruti were among the laggards
The top gainers on the BSE were Ultracem Co, ICICI Bank, SBI, Axis Bank, and Kotak Bank. The top laggards were Bharti Airtel, Tata Steel, HDFC Bank, Infosys, and HDFC