The BSE Sensex fell over 300 points, while the Nifty lost over 100 points, after MoS Finance SS Palanimanickam says India is reviewing its tax treaty with Mauritius. Bulk of India's foreign investors are believed to be based in Mauritius.
The review is sparking fears of more foreign selling in Indian markets given the bulk of overseas investors are believed to be based in Mauritius to avoid paying capital gain taxes.
Weak European markets opening and depreciating rupee also played spoilsport for the market.
The Nifty fell 1.95%, after earlier falling to as low as 5,082.45 points, its lowest since late January. The benchmark 30-share BSE index fell 1.97%.
The NSE Bank Nifty was down 3.4% while the BSE capital goods index was down 3.9%.
The breadth of the market was negative. About 632 shares advanced, 2077 shares declined, and 710 shares remain unchanged.
ICICI Bank and State Bank of Indiawere the worst hit amongst the blue-chip stocks, with the sector also hit after the RBI's Basel III directives.
Reliance Industriesfalls 1.8%, hit as well by media reports that India's petroleum ministry has struck down its plans to recover USD 1.2 billion in costs before the energy major starts sharing profits with the government from its gas field off the country's east coast.
The review is sparking fears of more foreign selling in Indian markets given the bulk of overseas investors are believed to be based in Mauritius to avoid paying capital gain taxes.
Weak European markets opening and depreciating rupee also played spoilsport for the market.
The Nifty fell 1.95%, after earlier falling to as low as 5,082.45 points, its lowest since late January. The benchmark 30-share BSE index fell 1.97%.
The NSE Bank Nifty was down 3.4% while the BSE capital goods index was down 3.9%.
The breadth of the market was negative. About 632 shares advanced, 2077 shares declined, and 710 shares remain unchanged.
ICICI Bank and State Bank of Indiawere the worst hit amongst the blue-chip stocks, with the sector also hit after the RBI's Basel III directives.
Reliance Industriesfalls 1.8%, hit as well by media reports that India's petroleum ministry has struck down its plans to recover USD 1.2 billion in costs before the energy major starts sharing profits with the government from its gas field off the country's east coast.
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