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LTCG tax reintroduction leads to equities’ steepest fall since November 2016 (Market Review)

Published

7 years ago

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By Porisma P. Gogoi
Mumbai, Feb 3 (IANS) The Indian equity markets witnessed the steepest fall since November 2016 — when demonetisation was put into effect — after the long-term capital gains (LTCG) tax on equities was re-introduced in the Union Budget for 2018-19, leading the Sensex to shed over 800 points and the Nifty50 over 200 points in a single day.

Breaking an eight-week winning streak, the key equity indices gave way to the bears following a huge sell-off in the markets on the last trading day of the week.

On a weekly basis, the barometer 30-scrip Sensitive Index (Sensex) tanked 983.60 points or 2.73 per cent to close trade at 35,066.75 points.

The wider Nifty50 of the National Stock Exchange (NSE) closed the week’s trade at 10,760.60 points — shedding 309.05 points or 2.79 per cent from its previous week’s close.

Market observers said disappointing announcements in the Budget like on the LTCG tax and a higher-than-expected fiscal deficit target for 2018-19 dampened the risk-taking appetite of investors.

“Domestic markets closed lower as investors were disappointed after the government proposed 10 per cent LTCG tax on equity gains above Rs 1 lakh in the Union Budget. The sentiments also got spooked after the finance minister revised upward its fiscal deficit target,” D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, told IANS.

“Also, market mood got badly suffered after Fitch Ratings on Friday said high debt burden of the government constrains India’s rating upgrade. Meanwhile, the divestment target for 2018-19 has been set at Rs 80,000 crore,” he added.

In the Budget announced on Thursday, Finance Minster Arun Jaitley proposed to tax LTCG on equities exceeding Rs 1 lakh at 10 per cent, which is expected to bring in revenue of Rs 20,000 crore.

The government also revised upwards its fiscal deficit target for 2017-18 to 3.5 per cent of the gross domestic product, or the equivalent of Rs 5.9 lakh crore, which was higher than the earlier target of 3.2 per cent for the current fiscal.

“The week gone by saw the Nifty correcting sharply. This week’s losses came after eight consecutive weeks of gains,” Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.

“Sectorally, there were no gainers. The top losers were the realty, pharma, PSU banks and energy indices,” he added.

On the currency front, the rupee weakened by 51 paise to close at 64.06 against the US dollar from its last week’s close at 63.55.

Provisional figures from the stock exchanges showed that foreign institutional investors purchased scrips worth Rs 2,099.45 crore, while domestic institutional investors worth Rs 145.73 crore during the week.

Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors bought equities worth Rs 2,923.18 crore, or $460.08 million, during January 29 and February 2.

Arpit Jain, AVP at Arihant Capital Markets, said: “This week, the Indian equity benchmarks fell 2.75 per cent the most since demonetisation week.”

“Both the indices fell by 2.4 per cent a day after government announced to tax equity investments held for more than a year to boost its revenue,” Jain told IANS.

The top weekly Sensex gainers were: Mahindra and Mahindra (up 1.73 per cent at Rs 768.50); Indusind Bank (up 1.54 per cent at Rs 1,755.60); Hero MotoCorp (up 1.51 per cent at Rs 3,623.65); Tata Consultancy Services (up 1 per cent at Rs 3,149.15); and Hindustan Unilever (up 0.11 per cent at Rs 1,372.70).

The losers were: Dr. Reddys Lab (down 15.25 per cent at Rs 2,122.10); Tata Steel (down 8.60 per cent at Rs 669.70); Axis Bank (down 7.95 per cent at Rs 564.95); ONGC (down 7.59 per cent at Rs 192.45); and Bharti Airtel (down 6.81 per cent at Rs 421.80).

(Porisma P. Gogoi can be contacted at [email protected])

–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma

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3 months ago

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September 3, 2024

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World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.

Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.

During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.

On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”

Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.

It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.

Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.

Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”

On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”

The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.

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