Sensex nosedives 800 points post Jaitley's 10% tax on sale of shares

WION Web Team
New Delhi, Delhi, India Published: Feb 02, 2018, 09:03 AM(IST)

File photo. Photograph:( Zee News Network )

The post-Budget sell-off dragged the Sensex down by a whopping 800 points while the broader Nifty cracked the 10,800-mark on all-round selling

The weak sentiment came a day after the government unveiled its budget for the year starting in April that raised spending for rural sectors and healthcare, widening the fiscal deficit target to 3.3 percent of gross domestic product from the previous 3.0 percent.

In the Budget speech, Finance Minister Arun Jaitley proposed to tax long-term capital gains on equities exceeding Rs 1 lakh at 10 per cent.

The investors also worried that the government's move to raise minimum support prices (MSP) for crops could lead to higher retail prices.

The decision was proposed at a time when consumer price inflation has already hit a 17-month high of 5.21 percent, well above the Reserve Bank of India's target of 4 per cent. 

"Long-term capital gains tax on equities is not welcomed by the markets and fiscal slippage is another reason that`s driving the markets down," said Neeraj Dewan, director, Quantum Securities.

On Thursday, the benchmark indices had closed trade on a lower note.

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