A massive bloodbath on stock markets has happened and what could have been worse? A whopping Rs 5 lakh crore invested in the Indian stock market has been swept off in just two trading session.
The market’s sentiments disrupted after Budget day when FM Jaitley announced a long-term capital gain tax. The market has dropped by 1,150 points in two sessions in the backdrop of a global sell-off amidst a negative LTCG remorsefulness.
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After the announcement of LTCG tax in the Union Budget 2018, the market sentiments of many investors became highly negative. The highly escalating markets over a long period of time were needing a correction phase. This is perhaps the commencement of the comprehensive correction.
“Selling continued in the market as concern over bond yield and weak global market impacted the sentiment. Upcoming RBI monetary policy will be a key trigger for the market, the outcome of which is expected to be status quo, but any commentary over government’s fiscal policy and concern over rising yield will add volatility,” Vinod Nair, Head of Research, Geojit Financial Services, said. Tax Budget
“Tax rate on both growth option as well as dividend option is the same i.e 10 percent. Hence the key thing to consider is the post-tax rate at which they can reinvest the dividend proceeds into some other alternative. For comparing the dividend reinvestment option, the expected rate of return on the dividend amount by the scheme compared with other alternative has to be compared,” Deepak Jasani, head retail research at HDFC Securities said. Tax Budget
The interest of DII’s and FII’s also seems to be decreasing in the light of 10% tax on the Long-term capital gain. The massive growth protential of India’s stcok markets seems to have taken a backseat in front of the new Budget changes and global sell-off.
The BSE benchmark Sensex slumped 449 points, or 1.29 percent, and is currently trading at 34,307.42 today. Tax Budget
