A clarification that came late
THE BEARS were in complete control of the proceedings on D-Street on Thursday. The result: the Sensex broke all technical support levels to fall by over 800 points, the biggest fall in the history of Indian stock markets. After recording an intra-day fall of 888 points, the Sensex closed at 11,391 as against the previous close of 12,217 ? a loss of 826 points (7 per cent). The NSE Nifty lost 246 points at 3,389 after touching a high of 3,636.45.
THE BEARS were in complete control of the proceedings on D-Street on Thursday. The result: the Sensex broke all technical support levels to fall by over 800 points, the biggest fall in the history of Indian stock markets.
After recording an intra-day fall of 888 points, the Sensex closed at 11,391 as against the previous close of 12,217 — a loss of 826 points (7 per cent).
The NSE Nifty lost 246 points at 3,389 after touching a high of 3,636.45.
Mirroring global trends after a major fall in the US market on Wednesday, Asian markets saw a sharp fall but the one in India was the biggest. The Nikkei went down by 1.35 per cent, the Hang Seng by 2.1 per cent, the Kospi by 2.59 per cent and the Jakarta Composite by over 4 per cent.
Nand Kumar Surti, CIO, Lotus Mutual Fund, said, “India only reflected what happened in the rest of the world. There’s empirical evidence to support the theory that the fall in India is always more than that in the other emerging markets.”
Another big factor contributing to the fall was the proposed Central Board of Direct Taxes (CBDT) guideline on capital gains tax on stock-market transactions.
Experts said the guideline was ambiguous and gave wide discretionary powers to the assessing officer. It affects not only FIIs but also ordinary investors who buy in the secondary market.
Clearing the air in the evening, Finance Minister P. Chidambaram said no FII had been assessed as a trader — scotching market talk that tax rates could be raised for them. “No FII has been assessed as a trader but as an investor because they’ve no permanent offices in India,” he said.
But fund managers said the government should have come out with the clarification during trading hours.