The benchmark Nifty was consistently trading below the 5300 level after the news that Mauritius government agreed to restart talks of revising the Double Taxation Avoidance Agreement (DTAA) treaty with India.
Finance Secretary said Mauritius gave in-principle nod to mull treaty review. He said they would discuss Mauritius tax treaty in July-August.
He also said, "We await Mauritius confirmation on tax treaty review date. We need framework before levying tax on Mauritius investment." "We can't arbitrarily tax investment routed from Mauritius," he added.
Stocks with investments from Mauritius as well as companies, which pledged shares, came in under pressure as more than 40% of India's total foreign direct investments (FDIs) come from Mauritius. GTL crashed 61% and GTL plummeted 41% despite clarification from company.
KS Oils tumbled 18%. Delta Corp, Alok Industries, HDIL, Lanco Infratech, IVRCL and Punj Lloyd fell 6-8%.
The 30-share BSE Sensex was trading at 17,523, down 348 points and the 50-share NSE Nifty slipped 107 points to 5,259. About nine shares declined for every one share advancing.
All sectoral indices were in the red. BSE Oil & Gas, Realty, IT, Power, Auto, Metal, Healthcare and TECk indices dropped 2-4%.
Heavyweights Reliance Industries, ONGC, TCS, NTPC, ITC, Infosys, HDFC Bank and Wipro were down 2-3.5%. Tata Motors and Cairn India fell 4%.
Reliance Communications was down 8% and Reliance Infrastructure down 7%. Reliance Capital and Reliance Power were down 4-4.5%.
The sell-off in global markets too added some more pressure on our markets. European markets like France's CAC, Germany's DAX and Britain's FTSE were down 1% each. US index futures namely Dow Jones and Nasdaq lost 0.5% each.
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