Mumbai: The stock market extended its losses with the Sensex dipping close to 500 points within minutes of Finance Minister P. Chidambaram announcing a hike in short-term capital gains tax to 15%, while leaving corporate tax and surcharge rates unchanged.
The 30-share Sensex was trading down by 464.86 points at the day’s low of 17,359.62.
While Finance Minister P. Chidambaram raised tax slabs for personal income tax assessees, he left corporate tax rates unchanged and raised short-term capital gains tax to 15% from 10%.
Loan Waiver fall
The Sensex dropped by over 200 points, in the middle of Finance Minister P. Chidambaram announcing loan waivers worth Rs60,000 crore for farmers in his budget speech. Although it was later clarified that the government would reimburse the banks for this, banking shares continued to be in the red.
The Sensex was trading 229.50 points down at 17,594.98. The index was trading with a loss of about 130 points just before the announcement on loan waivers, but the loss widened soon after Chidambaram said the government would provide debt waiver and relief to small and marginal farmers.
The government proposed to waive agricultural loans given by scheduled commercial banks, regional rural banks and cooperative credit institutions to farmers up to 31 March, 2007 and due for 31 December.
The Bombay Stock Exchange benchmark Sensex fell 90 points in morning trading today as cautious investors reduced their holdings ahead of Budget 2008-09.
The 30-share index opened weak at 17,779.54 and later moved downward to be quoted at 17,734.73 at 1030 hrs, down 89.75 points from previous close of 17,824.48.
The broader S&P CNX Nifty of the National Stock Exchange also fell by 29.80 points to 5.255.30 at 1030 hrs from last close of 5,285.10.
Marketmen said concerns over soaring crude oil prices and the US recession were the other major factors that contributed to the fall.
The US Federal Reserve reportedly failed to provide any major relief to recession while supporting market expectations for a 50 basis point rate cut in the near future.
The markets were trapped in a small range as investors adopted cautious approach in view of negative global factors and FII activity, they added.
The Bombay Stock Exchange benchmark Sensex fell by 129 points in early trade today as funds and general investors reduced their holdings ahead of the Budget 2008-09.
The 30-share index, which closed flat in the last two sessions, lost 129.70 to be quoted at 17,694.78 points after the first five minutes of trade.
The National Stock Exchange index Nifty was also lower by 44.20 points at 5,240.20 points.
Marketmen said the selling pressure emerged as stock market participants reduced their position before Finance Minister P Chidambaram presents the Budget in Parliament at noon.
They said a falling trend in global market also influenced the trading sentiment.