Budget 2018: LTCG tax Effect, Sensex slips 500 points, Nifty below 11000

Benchmark Sensex slid 136 points in late morning deals following continued selling pressure in key frontline shares of healthCar

Benchmark Sensex slid 136 points in late morning deals following continued selling pressure in key frontline shares of healthCar

The equity markets witnessed a massive sell-off on Friday wiping out almost Rs 4.58 lakh crore of investors wealth as the budget proposal to tax long term capital gain on equities and dividend distributed by mutual fund equity schemes dampened investors sentiment.

They also say foreign investors will flock to countries like Singapore and Dubai, which do not tax long-term capital gains.

With the Budget out of the way, the focus turns to RBI's monetary policy to be released later this month. The Centre on Thursday introduced a long-term capital gains tax of 10 per cent on stock market gains exceeding Rs 1 lakh, resulting in volatility in forex market.

Govt has chose to impose 10 per cent tax on LTCG for equity and equity-oriented investments for amount exceeding capital gains of Rs 1 lakh. Asian shares stumbled, with Korean and Japanese benchmark indices falling more than 1 per cent. The share market that opened over 36,000 points fell down by 438.79 points soon after the budget was announced in the Parliament today on February 1. The upward revision to the fiscal deficit target to 3.3 percent from 3 percent for 2018-2019 also dampened sentiment. However, all gains up to 31 January 2018 will be grandfathered.

January's Wage Growth Was Fastest in almost a Decade
A worker assembles chainsaw components at the Stihl Inc. manufacturing facility in Virginia Beach, Va., on January 11. Some are even willing to hire people with criminal records who would have been screened out in the past.

The major takeaways from the Budget were infrastructure boost, benefits to marginal farmers, extending corporate tax rate cut to Micro, Small & Medium Enterprises (MSME), and encouraging rural spending. The government revised the 2017-18 fiscal deficit target from 3.2% to 3.5%, a deviation from the path of fiscal consolidation, an impact of the GST system.

The government is firmly on course to achieve high growth of 8% plus as manufacturing, services and exports are back on good growth path. A rising gilt yield puts pressure on banks to hike their lending and deposit rates.

European stocks ended Thursday's session in the red, extending losses for the fourth straight session on worries over rising bond yields after US policymakers raised their forecast for inflation. The index gained over 4 percent in December.

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