Sensex Tanks 364 Points, Rupee Down By 13 Paise On Mauritius Treaty Reports

The BSE Sensex tanked 556 points before recovering a little to close at 4-month low of 17,507 today on reports that the government might impose capital gains tax on investments into India that are routed via Mauritius.

A large portion of foreign direct investment and stock market inflows are routed through Mauritius for tax benefits on account of a treaty between the two countries.

Weak markets globally and continuing FII outflows worsened the sentiment, pulling down to the 30-scrip Bombay Stock Exchange index, Sensex, to intra-day low of 17,314.38, a fall of over 556 points.

However, it recovered some ground after Finance Secretary Sunil Mitra said India “cannot impose (the tax) arbitrarily”.

Sensex finally ended the day at 17,506.63, a fall of 363.90 points or 2.04 per cent. In four straight sessions, it has tumbled 802.03 points or 4.38 per cent.

From: http://ping.fm/MnlHP