Indian equity benchmarks fell sharply in Tuesday's trade after Union finance minister Nirmala Sitharaman concluded her Budget 2024 speech. Sitharaman announced raising of long-term capital gain (LTCG) tax on all financial assets, including equity, to 12.5 per cent from 10 per cent at present. She also increased short-term capital gain tax to 20 per cent from 15 per cent earlier.
The domestic benchmarks dragged by banks, financials, realty and energy stocks. The BSE Sensex slumped over 1,150 points while the NSE barometer Nifty hit the sub-24,150 level. At 12:36 pm, the 30-pack Sensex was down 1,178 points or 1.46 per cent at 79,324. The NSE benchmark was down 382 points or 1.56 per cent at 24,127. Such was the fall in the domestic indices that around Rs 8.8 lakh crore of BSE market capitalisation (m-cap) was wiped out.
"We can expect short-term market volatility following the recent tax rate changes, as such adjustments likely to affect investor sentiment. The increase in long-term capital gains tax might prompt some investors to reassess their investment strategies, particularly in assets that were previously more tax efficient," said Adhil Shetty, CEO of Bankbazaar.com.
Overall, while these measures aim to boost government revenues, they could introduce a period of adjustment and uncertainty in the markets, Shetty added.
"We should closely monitor Nifty's key support level at 24,150. If the index manages to hold this level despite Budget's negative implications, it could resume its bullish momentum and target 25,000 level. Conversely, if Nifty falls below 24,150, it may decline further towards the 23,640 level," said Santosh Meena, Head of Research at Swastika Investmart.
Here's a look at today's market fall in numbers:
Rs 8.8 lakh crore investor wealth lost
Investor wealth, as suggested by the BSE m-cap, fell Rs 8.85 lakh crore to Rs 439.46 lakh crore compared with a valuation of Rs 448.32 lakh crore recorded in the previous session. Frontline stocks such as Reliance Industries Ltd (RIL), Larsen & Toubro (L&T), HDFC Bank, ICICI Bank, State Bank of India (SBI), Bajaj Finance, Bharti Airtel and PowerGrid contributed to the fall today.
31 stocks hit 52-week lows on BSE
As many as 31 stocks hit their 52-week lows today. BSE allcap stocks such as Aptech Ltd, Landmark Cars Ltd, Repro India Ltd and TruCap Finance Ltd their respective one-year low levels. That said, 137 stocks touched their one-year high levels today.
2,865 stocks in the red
Out of 3,917 stocks, 2,865 stocks were seen declining. Only 932 stocks were advancing, while 120 stocks remained unchanged.
NIACL, IRFC & IRCON down up to 7%
Shares of The New India Assurance Company Ltd, IRFC, IRCON International, HUDCO, RCF, RVNL, Jupiter Wagons, Vedanta, NHPC, Vodafone Idea and NBCC (India) fell up to 7.35 per cent.
Banks, financials & realty among top drags
For Sensex, the major culprits that dragged the index lower were RIL, L&T, HDFC Bank, ICICI Bank, Airtel, Bajaj Finance, SBI, Axis Bank and Infosys. Reliance, L&T and ICICI Bank alone contributed negatively to a 423-point decline.
On NSE, 15 out of 16 sub-indices were down. Nifty Bank, Nifty Financial Services, Nifty Realty and Nifty Oil & Gas fell sharply.