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Budget 2018: Sensex, Nifty close lower after LTCG tax, fiscal concerns

Benchmark equity indices BSE Sensex and Nifty closed in the red as the budget belied market hopes. Finance Minister’s LTCG tax announcement and a raised fiscal deficit target marred sentiment on the street.

business Updated: Feb 01, 2018 17:21 IST
budget 2018,Arun Jaitley speech,Sensex
Benchmark indices BSE Sensex and NSE Nifty opened higher on Thursday as finance minister Arun Jaitley is set to announce the union budget of fiscal year 2018-19. (Bloomberg)

Benchmark equity indices closed lower after a day of a steep crash and recovery on budget day. BSE Sensex fell 58.36 points to close at 35,906.66, while the NSE Nifty 50 slipped 10.80 points to 11,016.90, as markets gave a thumbs down to Budget proposals like long-term capital gains tax on equities.

The 30-share index had plunged over 460 points in afternoon trade after Finance Minister Arun Jaitley announced long-term capital gains tax of 10 % on stock market gains exceeding Rs 1 lakh.

Sentiment also took a hit after the fiscal deficit target for 2017-18 was raised to 3.5 % of GDP as against 3.2 % earlier.

The target for 2018-19 has been fixed at 3.3 % as against the Fiscal Responsibility and Budget Management Act target of 3 %.

Markets reeled under heavy selling pressure, but large- scale buying by domestic institutional investors towards the later part of the session blunted the impact.

The BSE Sensex started on an optimistic note at 36,048.99 and advanced to 36,256.83 points during the presentation of the Budget but turned negative after Jaitley announced long term capital gains tax, hitting a low of 35,501.74.

Vakrangee contributed most to the losses, as the stock tanked 19.99%, locked in lower circuit for the second straight day. Other losers in trade were Fortis (-4.96%), Hindustan Copper (-5.70%) and Religare (-4.95%)

Stocks on the winning side included IIFL Holdings (11.09%), Avanti Feeds (7.95%), Aegis Logistics (10.57%) and JK Tyres (7.25%)

First Published: Feb 01, 2018 09:56 IST