LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » India News

LTCG tax, political tensions, US Fed, and more: Five reasons why Sensex tanked 509 points

Sensex today: Experts believe the long-term capital gains (LTCG) tax deadline of March 31 is weighing on the markets, while political uncertainty after Chandrababu Naidu-led Telugu Desam Party (TDP) walked out of Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) and negative trend in global markets on trade war fears added to the losses.

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
LTCG tax, political tensions, US Fed, and more: Five reasons why Sensex tanked 509 points
Sensex today: Market breadth, indicating the overall health of the market, turned negative. Image source: Reuters
Written By: ZeeBiz WebTeam
Updated: Fri, Mar 16, 2018
03:50 pm
ZeeBiz WebDesk
RELATED NEWS
Anil Singhvi’s Strategy February 24: Day support zone on Nifty is 14,625-14,675 & Bank Nifty is 34,900-35,100 Anil Singhvi’s Strategy February 24: Day support zone on Nifty is 14,625-14,675 & Bank Nifty is 34,900-35,100
Anil Singhvi’s Strategy February 23: Day support zone on Nifty is 14625-14675 & Bank Nifty is 34900-35100 Anil Singhvi’s Strategy February 23: Day support zone on Nifty is 14625-14675 & Bank Nifty is 34900-35100
Anil Singhvi’s Strategy February 22: Day support zone on Nifty is 14900-14975 & Bank Nifty is 35550-35600 Anil Singhvi’s Strategy February 22: Day support zone on Nifty is 14900-14975 & Bank Nifty is 35550-35600
Anil Singhvi’s Strategy February 19: Day support zone on Nifty is 14,975-15,065 & Bank Nifty is 36,325-36,400 Anil Singhvi’s Strategy February 19: Day support zone on Nifty is 14,975-15,065 & Bank Nifty is 36,325-36,400
Anil Singhvi’s Strategy February 18: Day support zone on Nifty is 15,115-15,165 & Bank Nifty is 36,625-36,750 Anil Singhvi’s Strategy February 18: Day support zone on Nifty is 15,115-15,165 & Bank Nifty is 36,625-36,750

Sensex today: The benchmark indices had a severe fall on Friday with the Nifty breaking below its two crucial support zones - 10,300 and 10,200 - in a single session. The Sensex settled at 33,176, down 509 points, while the Nifty ended at 10,195, down 165 points. Broader indices outperformed marginally, slipping over 1 per cent each. Market breadth, indicating the overall health of the market, turned negative. On the BSE, 1,763 stocks declined, 917 stocks rallied, while 168 stocks remained unchanged. 

Experts believe the long-term capital gains (LTCG) tax deadline of March 31 is weighing on the markets, while political uncertainty after Chandrababu Naidu-led Telugu Desam Party (TDP) walked out of Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) and negative trend in global markets on trade war fears added to the losses. Investors were cautious ahead of US Federal Reserve monetary policy too. 

"Market slid as investors continued to remain cautious amid current issues in US administration on global trade & domestic political uncertainties. Market is finding it difficult to consolidate at the support levels as volatility in global market brought the benchmark indices towards the 200-DMA. Selling was broad based, metal index lost its sheen while PSU banks somehow managed to get stabilised with a slight decline," said Vinod Nair, Head of Research, Geojit Financial Services.

Brokerages had a cautious view on the markets at the beginning of the March series, expecting the Nifty50 to dip towards 10,000. 

"On the upside, 10,600-10,650 will serve as a resistance, while on the downside psychological level of 10,000 can’t be ruled out," Edelweiss Securities in its rollover report. 

"Any breach of 10,000 mark will pave way for an immediate dip of further 100-150 points," it added. 

Here are five reasons that pulled the markets down today:

1) LTCG tax-linked selling:

Investors may have been selling stocks where they sit on profits in order to avoid long-term capital gains (LTCG) tax introduced in Budget 2018. Notably, the changes in LTCG tax will kick in from April 1 as the profits made until March 31 had been kept tax-free. 
 
“The new tax regime will be applicable to transfer made on or after 1st April, 2018, the transfer made between 1st February, 2018 and 31st March, 2018 will be eligible for exemption under clause (38) of section 10 of the Act,” the government the income tax department clarified earlier. 

2) Political tensions

Investor sentiment turned negative after N Chandrababu Naidu-led Telugu Desam Party (TDP) on Friday walked out of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), days after two of its ministers quit the Narendra Modi Cabinet over the denial of special-category status to Andhra Pradesh. The move holds significance after BJP witnessed defeat in UP and Bihar bypolls.

However, Shankar Sharma of First Global said it will be too premature to react on political uncertainty. 

"General elections are 8-10 months away. Markets may react one month prior to elections, when the exit poll results come out, but in staying away from the markets because of political uncertainty is premature," he said. 

3) Global rout

Asian markets slid as reports of more chaos in the Trump administration tested investors’ nerves, already frayed by fears that US tariffs could hurt the global economy. European markets also opened weak. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.2 per cent. Japan’s Nikkei was down 0.6 per cent. On Wall Street, the S&P 500 edged 0.08 per cent lower on Thursday, marking its first four-day losing streak of 2018. The Nasdaq Composite dropped 0.2 per cent.

4) US Federal Reserve policy meet

Markets remained under pressure as investors braced for next week’s Federal Open Market Committee (FOMC) meeting at which the US Fed is expected to raise interest rates. The dollar index, which measures the greenback against a basket of six other major currencies, was up 0.26 per cent at 89.937. After the data, Fed funds futures data showed a lower chance of a fourth rate hike this year.

5) Valuations expensive

The markets are richly valued too. The trailing 12-month price to earnings (PE) ratio is ruling at 23.30, while the 12-month forward PE is 18.7 times, an 8 per cent premium to the long-period average of 17.3 times.

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
SensexNifty
RELATED NEWS
Anil Singhvi’s Strategy February 24: Day support zone on Nifty is 14,625-14,675 & Bank Nifty is 34,900-35,100 Anil Singhvi’s Strategy February 24: Day support zone on Nifty is 14,625-14,675 & Bank Nifty is 34,900-35,100
Anil Singhvi’s Strategy February 23: Day support zone on Nifty is 14625-14675 & Bank Nifty is 34900-35100 Anil Singhvi’s Strategy February 23: Day support zone on Nifty is 14625-14675 & Bank Nifty is 34900-35100
Anil Singhvi’s Strategy February 22: Day support zone on Nifty is 14900-14975 & Bank Nifty is 35550-35600 Anil Singhvi’s Strategy February 22: Day support zone on Nifty is 14900-14975 & Bank Nifty is 35550-35600
Anil Singhvi’s Strategy February 19: Day support zone on Nifty is 14,975-15,065 & Bank Nifty is 36,325-36,400 Anil Singhvi’s Strategy February 19: Day support zone on Nifty is 14,975-15,065 & Bank Nifty is 36,325-36,400
Anil Singhvi’s Strategy February 18: Day support zone on Nifty is 15,115-15,165 & Bank Nifty is 36,625-36,750 Anil Singhvi’s Strategy February 18: Day support zone on Nifty is 15,115-15,165 & Bank Nifty is 36,625-36,750

LATEST NEWS

Gangubai Kathiawadi: AMAZING Alia Bhatt! Check POWERFUL first look, story, release date, cast and other details

EPFO Members Alert! EPF contribution rule may change if government accepts this labour union's demand

In chat with Anil Singhvi, Market Expert Ajay Bagga talks about increasing bond yields, its impact on economy and Bitcoin price crash

Your PAN card may soon become inoperative; you may be fined too if you miss this deadline — Check last date

Big message! PM Narendra Modi says government has no business to be in business

Stocks To Buy With Anil Singhvi: Ashish Kukreja suggests Mahindra EPC, Greenlam Industries and Natco Pharma

Realme Narzo 30A, Realme Narzo 30 Pro 5G launched in India - Check Price, Camera, Specs, Offers and more!

BOOSTER dose for Yes Bank! CDP rates ‘A-' (Leadership Band); achieves Environmental Management System certification for eighth year

PLI scheme: Tapping India's manufacturing capabilities! Big step from Modi government to woo global players

NPCIL Recruitment 2021: Salary up to Rs 56,100 - Check how to apply date, age limit, website and other details here

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved