Sensex posts biggest drop this year, ITC hammered after govt hikes cess
Markets ended their bullish run after tobacco stocks were hammered by the hike in cess on Monday. Photograph: (Reuters)
The 30-share BSE Sensex ended its bullish run and fell 1.1 per cent, its biggest fall this year in percentage terms, led by tobacco major ITC after government hiked cess on cigarettes under GST on Monday.
Sensex closed the day at 31,710.99, a fall of 363.79 points or 1.1 per cent. The broader 50-share Nifty fell 0.9 per cent to close at 9,827.15.
Shares of ITC crashed by as much as 15 per cent on an intraday basis after the GST Council, in a meeting on Monday, decided to hike compensation cess on cigarettes.
The move was aimed to take away the "windfall profit" enjoyed by the cigarette makers after tax burden on them fell after imposition of GST, finance minister Arun Jaitley said, Reuters reported.
The GST came into effect from July 1.
Deutsche Bank estimates cigarette prices to go up by as much as 16 per cent, Reuters reported.