Sensex closes 152 points lower, Nifty below 7,000 after Union budget announcement

Mumbai: Benchmark equity index, Sensex, pared the intraday losses to close 152 points lower on Monday, as market participants gave a thumbs down to finance minister Arun Jaitley’s Union budget announcements, particularly with respect to taxing of dividend income in the hands of high net-worth individuals (HNIs).

Earlier in the day, the Sensex fell as much as 2.85%, or 659.69 points, to 22,494.61, while the Nifty 50 slipped as much as 2.9%, or 203.95 points, to 6,825.8 points.

However, the Sensex recouped some losses to close 0.66%, or 152.30 points, lower at 23,002, while the Nifty closed 0.61%, or 42.70 points, lower at 6,987.05.

“Some of the steps related to DDT (dividend distribution tax) are negative which is hurting the market,” said Deven Choksey, group managing director, KR Choksey Investment Managers Pvt. Ltd.

“There is nothing really for the market to cheer,” said independent analyst Ambareesh Baliga.

In his budget speech, Jaitley said that apart from the corporate DDT, those individuals or Hindu Undivided Families (HUFs) with a dividend income of more than Rs.10 lakh will be charged additional tax.

The budget proposed bank recapitalization allocation for state-owned banks of Rs.25,000 crore in 2016-17, which was below market expectations.

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