The stock markets were volatile on Tuesday after the government announced an increase in the securities transaction tax (STT) on futures and options (F&O) trade in the Union Budget for the fiscal year 2024-25.
Foreign institutional investors (FIIs) sold Indian stocks worth ₹17,306.08 crore and bought stocks worth ₹14,330.77 crore, leading to a net outflow of ₹2,975.31 crore, according to data from the National Stock Exchange (NSE).
Domestic institutional investors (DIIs)
Domestic institutional investors (DIIs), on the other hand, bought equities worth ₹17,799.44 crore and sold shares worth ₹16,380.62 crore, resulting in a net inflow of ₹1,418.82 crore.
On Monday, FIIs had bought Indian stocks worth ₹3,444.06 crore. Union Finance Minister Nirmala Sitharaman announced that the STT on F&O trades will be raised from October 1 to discourage retail investors from investing in these risky instruments.
Rates of STT
“It is proposed to increase the rates of STT on the sale of an option in securities from 0.0625% to 0.1% of the option premium, and on the sale of futures in securities from 0.0125% to 0.02% of the price at which such futures are traded,” she said during her budget speech.
She also proposed raising the short-term capital gains tax (STCG) to 20% and the long-term capital gains tax (LTCG) to 12.5%.
These announcements led to the Sensex and Nifty 50 falling by 1.6% and 1.77%, respectively, during intra-day trading.
However, changes in income tax slabs, tax exemptions, and customs duty cuts helped the stock indices recover most of the day’s losses.
Sensex and Nifty
The 30-share BSE Sensex closed down by 73.04 points, or 0.09%, at 80,429.04.
During the intra-day trading, the Sensex fell by over 1,200 points, hitting a low of 79,224.32.
The NSE Nifty 50 dipped by 30.20 points, or 0.12%, to end at 24,479.05. During the day, it dropped 435.05 points, or 1.77%, to 24,074.20. Among the Sensex pack, Titan jumped over 6%, followed by ITC, which surged more than 5%.
BSE midcap index
In the broader market, the BSE midcap index fell by 0.74% while the smallcap index dropped by 0.18%.
The consumer durables and FMCG sectors were among the top performers, gaining 2.45% and 2.48%, respectively. Among other sectoral indices, IT rose by 0.82%, services added 0.62%, healthcare gained 0.59%, and teck added 0.56%.
Realty shed 2.15%, capital goods fell by 2.03%, industrials lost 1.48%, financial services dropped 1.27%, metal declined 1.02%, commodities dipped 0.51%, and telecommunications lost 0.51%.
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