Sensex tanks 2.5%, down 839 pts, Nifty ends below 10,800 on Budget woes


Benchmark indices tumbled on Friday as the long-term capital gains tax on equities investments dampened sentiment, while bonds slid for a second consecutive session on worries the central bank would become more hawkish on inflation.

The weak sentiment came a day after the government unveiled its budget for the year starting in April that raised spending for rural sectors and healthcare, widening the fiscal deficit target to 3.3% of gross domestic product from the previous 3.0%. The government also unveiled a 10 percent tax on long-term capital gains in equity markets.

Investors worried that higher spending and the government’s move to raise minimum support prices for crops could lead to higher retail prices at a time when consumer price inflation has already hit a 17-month high of 5.21%, well above the Reserve Bank of India’s target of 4%.

BHEL, Bajaj Auto, Bajaj Finance and Tata Power lost the most on both indices, while TCS, Wipro, Tech Mahindra, and HCL Tech were the top gainers.

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Markets settle holiday-truncated week lower, Nifty ends at 9,150


The benchmark indices on Thursday settled the holiday-truncated week lower after index heavyweight Infosys’ revenue guidance and plan to distribute cash to shareholders fell short of expectations, raising concerns at the start of the March quarter earnings.

The geopolitical worries, after the United States launched cruise missiles against an air base in Syria last week and fears of a new weapons test by North Korea, also contributed to the losses.

Investors also took cues from the index of industrial production (IIP) data, which contracted in February and consumer price index (CPI)-based inflation data, which edged up in March.

The S&P BSE Sensex settled at 29,461, down 182 points, while the broader Nifty50 ended at 9,150, down 53 points. For the week, the Sensex shed 245 points or 0.8%, while the Nifty slipped 47 points or 0.5%.