Sreedhara.com

           Today (04/18/2006) is the worst day in Indian stock market history. Indian stock market have seen highest ever single day absolute fall today.  See the following table for details how indices performed today.

              This fall is in accordance with global markets trading sentiment & and most of the Asian and European stock markets also have seen more than 3% fall. FIIs have off-loaded heavily in Indian stock markets because of worries over overseas equity and metal market.  Indian stock analysts feel that the triggers are
hike in Fed rates, very weak global metal market and weakness in most of the emerging markets.  Apart from these concerns, a proposal by Board of Direct taxes to increase tax on FIIs investments. As of now FIIs are paying only 10 %  short-term gains tax on their investments in Indian stock markets, but now this board gave proposal to treat short-term gains of these FIIs investments as a business income because FIIs are trading heavily in Futures and Options to hedge their investments in cash market. So, if this proposal is accepted by finance ministry, then FIIs  need to pay around 41% as taxes. That is huge increase in taxes payable by FIIs from 10 % to 41 % .  So FII are in a hurry to exit from market. Most of the Indian domestic traders are now paying more taxes on their profits because the profit from speculative is treated as a business income, now the board proposed same rule for FIIs also.

                     In today’s stock market fall the biggest loser is obviously metal sector, this index is dropped by almost 12%. Next biggest losers are oil & gas, FMCG, Auto and commodities sectors.  There is not even a single gainer in SENSEX .  In BSE-500 index only 5 stocks are there in gainers and remaining 495 are losers.

       In Indian stock market history this is fourth highest ever fall in terms of percentage.

        In 1992     -    more than 12 %  fall - reason for this fall is scam in Indian stock markets

        in 2004    -     more than 11% fall - reason is government change in Center

        in 2000     -     more than 7 % fall   — reason is dot com bubble.

         Today      –    - 6.76%

  Most of the traders / investors have lost their fortunes in today’s blood bath in the stock markets.  Tomorrow is the very crucial day for the markets according to stock analysts.  Government has to  come up with a clarification about  taxes on FIIs investments before tomorrow’s trading session starts, otherwise  If tomorrow also we see free fall in the market, then it will be a big concern for all of us.  God may save us.