India’s key stock indices plunged 1% on Wednesday, tracking a weakness in global markets and as cautious investors awaited a decision on the long awaited Goods and Services Tax, which is likely to be passed in the Rajya Sabha.
Profit booking was also seen in some of the recent bluechip outperformers, which dragged the Bombay Stock Exchange’s Sensex down by 284 points or 1.02% to 27,697.51 points. The wider NSE Nifty ended down 78 points or 0.9% at 8,544.85 points.
“Even if the GST is passed in the Rajya Sabha, all the states will still have to ratify it and that will take time. Also, there is still uncertainty over what the final tax rates will be under GST,” said Sageraj Bariya, vice-president at East India Securities.
Stocks of most of the consumer-facing companies too had run up a bit in the last few sessions and so a correction there was warranted, he felt.
Among the Sensex components, 25 stocks ended in the red. Tata Motors tumbled 3%, ITC was down 2.9% and Maruti Suzuki slipped 2.3%. Most other automobile stocks such as Mahindra & Mahindra, Hero MotoCorp and Bajaj Auto also ended down.
Weakness prevailed in most Asian markets earlier on Wednesday with Japan’s Nikkei Stock Average declining by more than 1%. A strong Yen is adding to worries over the prospects of Japan’s economic recovery.
Hong Kong’s Hang Seng, Korea’s Kospi and Singapore’s Straits Times indices also fell more than 1%. Most European markets were also trading flat to negative.