Markets fall on weak global cues
Indian equities witnessed a broad-based fall on Wednesday amid weak global cues after the US Federal Reserve cut its economic growth forecast, reports Vyas Mohan.business Updated: Nov 21, 2007 22:36 IST
Indian equities witnessed a broad-based fall on Wednesday amid weak global cues after the US Federal Reserve cut its economic growth forecast and also on reports that the finance ministry could hike the securities transaction tax (STT).
The securities transaction tax or turnover tax, as is generally known, is levied on taxable securities transactions, including the purchase or sale of equity shares through a recognised exchange.
While the benchmark Sensex of the Bombay Stock Exchange ended the day lower by 678 points or 3.52 per cent at 18,602.62, the broader Nifty of the National Stock Exchange closed at 5,561 points, down by 3.8 per cent or 219.85 points.
"Foreign institutional investors (FIIs) have been sellers for the past few sessions, which has dampened the sentiment to some extent. Also, with Morgan Stanley downgrading India and China, coupled with the reports of a hike in the STT triggered a sell off today. The worst hit were the banking, metals and capital goods sectors, while the FMCG sector was least affected," said Janak Thacker, CEO of Lalkar Securities.
According to data available with market regulator Securities and Exchange Board of India (SEBI), FIIs have sold equities worth a net Rs 1,389.10 crore in the current month so far.
Media reports said that the finance ministry was considering raising the rate at which securities transaction tax is levied, adding that an option was increasing the ceiling to 0.5 per cent of the value of the taxable securities transactions. At present, it is levied at rates of 0.017-0.25 per cent on every transaction on domestic bourses. Chartists felt that the benchmark indices have slipped below their immediate support levels and could trade weaker, if key levels are breached further. The Sensex has closed below its technical support level of 18,950 and it now remains to be seen if it holds above the next support, they added. Vinit Birla, a technical analyst with Pranav Securities, said: "Technically, the Nifty has support at 5,478 and the Sensex at around 18,333. If these levels are breached, weakness could persist."