HindustanTimes Wed,26 Nov 2014

Cyprus, rate watch drag Sensex down

HT Correspondent, Hindustan Times  Mumbai, March 18, 2013
First Published: 16:55 IST(18/3/2013) | Last Updated: 21:51 IST(18/3/2013)

The benchmark Sensex of the Bombay Stock Exchange on Monday fell 134 points, or 0.7%, to end at nearly two-week low of 19,293 as a proposed bailout of Cyprus rattled global markets and local investors adopted a cautious stance ahead of Reserve Bank of India’s (RBI’s) monetary policy review on Tuesday.


The Nifty also fell by 37 points, or 0.6%, to 5,835.

“The news on Cyprus needing to be bailed out and resorting to taxation on deposits for funding the bailout is negative for market sentiment,” said Gautam Sinha Roy, vice-president, equities, Motilal Oswal Securities. “Cyprus is a routing centre for offshore investments due to its low-tax regime. These investments could be affected by the new tax. This tax also sets a dangerous precedent for countries needing to be bailed out, especially in the euro zone.”

The condition for Cyprus’ bailout is that all bank deposits in the country will be levied a one-time tax. Cyprus has tax treaties with many nations, making it attractive for investors.

Brokers also said funds turned cautious and investors offloaded part of their positions before the RBI policy meeting. ICICI Bank dropped by 1.5%, SBI by 0.6% and HDFC by 1%.

more from Business

Rupee rebounds 8 paise against dollar to end at 61.86

After breaching the 62-mark in early trade, Indian rupee on Tuesday rebounded and ended with a gain of 8 paise at 61.86 against the Greenback on account of suspected RBI intervention through state-owned banks.

Most Popular
Copyright © 2014 HT Media Limited. All Rights Reserved