INSUBCONTINENT EXCLUSIVE:
Mumbai: The stock market slumped after finance minister Nirmala Sitharaman refused to exempt foreign portfolio investors (FPIs) structured
as trusts from a higher tax surcharge
Overseas investors sold shares worth Rs 950 crore on Friday as the increased levy added to concerns over an economic slowdown among other
issues.
The Nifty slid 177.65 points, or 1.53 per cent, to close at 11,419.25 while the Sensex slipped 560.45 points, or 1.44 per cent, to
Of the 50 Nifty stocks, 43 ended in the red
The volatility index jumped 6 per cent to end at 12.45, reflecting heightened nervousness.
The weakness was led by auto and finance stocks,
with Mahindra - Mahindra, Bajaj Finance, Tata Motors, Hero Moto-Corp, IndusInd Bank and Yes Bank ending down 3-4 per cent, making them the
worst performers on Sensex
Reliance Industries ended down 1 per cent ahead of its June quarter result.
The broader market fared worse, with the BSE MidCap index losing
2 per cent and the SmallCap index falling 1.8 per cent.
The finance minister had suggested in her reply to the Finance Bill on Thursday that
trust-based FPIs convert themselves into companies to avoid paying the higher surcharge
8,093 crore from Indian equities so far in July due to uncertainty over taxation issues
On Friday, domestic institutional investors bought local stocks worth a net Rs 734 crore.
Besides the FPI tax issue, the budget had also
detailed other proposals that have spooked markets
The finance minister had recommended that the Securities and Exchange Board of India (Sebi) look at increasing the minimum public
shareholding limit to 35 per cent from 25 per cent
Brokerages estimate this could flood the market with nearly Rs 4 lakh crore of equity supply and could be a problem if the timeline for
implementation is less than three years
consolidation, which is good for the bond market, but the equity market was looking for a stimulus which did not come through, and so the
levied on top of the applicable income tax rate from 15 per cent to 25 per cent for those with taxable incomes between Rs 2 crore and Rs 5
crore, and to 37 per cent for those earning more than Rs 5 crore.
