Unraveling the Nifty Coin (NFTY) Drop: A 3-Week Low Following Record Highs in the Cryptocurrency Market
- India’s benchmark equity indices hit a three-week low amid rumors of changes to capital gains taxes on equities and election jitters.
- Finance Minister Nirmala Sitharaman dismissed the rumors as “pure speculation”.
- The Nifty50 opened higher on Friday, reaching a record intraday high of 22,794.7 points, before ending the day’s trading in the red.
Amid election jitters and rumors of changes to capital gains taxes on equities, India’s benchmark equity indices hit a three-week low. The Nifty50, however, opened higher on Friday, reaching a record intraday high before ending in the red.
Market Anxiety and Election Jitters
Investors have been cautious, with some taking money off the table ahead of and during the ongoing national election. Over the past month, both the Nifty50 and the S&P BSE Sensex have remained almost unchanged, indicating a cautious sentiment among investors. However, profit-booking on Friday was mainly triggered by rumors of changes to the capital gains treatment of equities post the election results, further souring investor sentiment.
Capital Gains Tax Rumors
“On Friday, rumors of adverse STCG (short-term capital gains) tax changes post the formation of new government and of some cooling of the margin of victory by NDA alliance caused a minor selloff,” said Deepak Jasani, head of retail research at HDFC Securities Ltd. Currently, the short-term capital gains tax is 15% for equities held for less than 12 months, and long-term capital gains are taxed at 10%.
