Domestic market would stabilise soon, says Hasmukh Adhia

In the wake of a selling frenzy in the Indian equity markets during the morning trade, wherein, the Sensex plunged by over 1,000 points, Finance Secretary Hasmukh Adhia today expressed hope that domestic market would stabilise soon.

The doemstic share market was mimicing weakness in global equity market and it cannot be attributed to LTCG tax levy alone, said the Finance Secretary.

Market regulator SEBI is keeping a close watch on the stock market decline, Adhia said. 

Earlier on Monday, the Finance Secretary said the sell-off in equity markets is due to a weak global sentiment and not beacause of long-term capital gains tax announced in the budget

Further, he had claried that 10 per cent tax on long term capital gains (LTCG) is a "subsidised rate" as such gains on sale of unlisted scrips and immovable property are taxed at 20 per cent.

"It is very unfortunate that our move came in at wrong time because of global markets also going down. There is a strong connection of all equity markets. The MSCI all country index of equity markets went down by 3.4 per cent in last week, especially on Thursday Friday," said Adhia said at a post-budget meet organised by industry body CII.

"If the entire world index has gone down by 3.4 per cent, naturally it would have ripple effect on Indian stock market also. It is not LTCG tax effect," he added.

The Sensex today traded lower by 1,074.79 points or 3.09 per cent to 33,682.37 points from its previous close of 34,757.16 points at 10.30 am.

The NSE Nifty50 also traded lower by 320.80 points or 3.01 per cent at 10,345.75 points.

On Monday, Indian stock market has also suffered losses of up to 2.4 per cent after deep correction in the US markets last week triggered by a sharp rise in Treasury yields.