Mumbai: The BSE Sensex tumbled to 2-month low of 17,052.78, down 309 points on a string of negatives, including worries over market reports that the government may levy short-term capital gains tax for derivative products sold to foreign investors. (Agencies)
Besides, global equity markets failed to offer strong support to investors and showed a mixed trend. All the 30 Sensex scrips and the 13 sectoral indices closed in the red.
Realty stocks bore the sell-off brunt on reports that the Maharashtra government proposes to hike stamp duty for properties by as much as 160 times.
Stock markets have been weak since the Union Budget 2012-13 on March 16 on account of various proposals, including move to retrospectively amend the Income Tax Act to bring in the net overseas deals that involve Indian companies.
Analysts said investors off-loaded positions amid market speculations that the government may tax participatory notes (P-notes) of foreign investors for buying Indian equities.
"Markets tumbled on concerns that the participatory notes through which some foreign investors buy into Indian equities could be taxed," said Kishor Ostwal, CMD CNI Research.
Besides, plunging rupee, high fiscal deficit and rising oil prices have stoked macro-economic concerns.
Sensex opened higher at 17,377.59 but soon fell and remained in the negative terrain. It closed at 2-month low of 17,052.78, down 308.96 points or 1.78 percent from Friday.
The NSE 50-share index Nifty plunged 93.95 points or 1.78 percent to finish below 5,200-mark of 5,184.25.
"Weakening rupee disturbed the sentiments in the markets. Any further rise in dollar rates could hurt the overall sentiments," said Milan Bavishi Head Research Inveture Growth & Securities.
"Markets opened on a cautious note on the first day of the March derivative series expiry week. Although cues from the US markets were positive, Asian markets remained subdued. However, neutral to negative openings in the European markets fuelled the sell off in the market during the late afternoon session," Shanu Goel Research Analyst Bonanza Portfolio said.
Globally, key indices in Taiwan, Singapore and South Korea closed lower. Japan and China markets nearly flat.
Mumbai: The BSE Sensex tumbled to 2-month low of 17,052.78, down 309 points on a string of negatives, including worries over market reports that the government may levy short-term capital gains tax for derivative products sold to foreign investors.