Knives are out for NAMO and Arun Jaitley, investors vow to vote-out BJP in 2019 elections
Tempers are running high at Dalal Street. Novices and veterans are aimlessly shuffling around, with a dazed and shell-shocked look at their faces.
The reason for this is the savage crash that the market saw yesterday in the aftermath of the Budget levying tax on LTCG.
The Sensex and Nifty crashed a whopping 839 and 256 points respectively.
The Nifty SML 100 index, which represents the index of small-cap stocks, sunk a mammoth 532 points, constituting 6.06% of the Index.
Investors lost a fortune of Rs 4.6 lakh crore in the carnage.
All multibagger aspirations disappeared into thin air, leaving investors feeling bitter and disappointed.
Carnage On Dalal Street: #Nifty Down 175 Pts, Sensex Down 558 Pts Panic Selling Seen In Broader Markets.
Smallcap Down 800 Points, BSE Midcap Down 600 Points.
Realty, Media, Infra, Metals And Banks Top Loosing Sectors.#LIVE https://t.co/cRN0uQ7kqT pic.twitter.com/SKwdHNawma
— BTVI Live (@BTVI) February 2, 2018
Naturally, some investors are so frustrated that they vowed not to vote for the BJP in the upcoming elections.
Some fumed that they would “not even step into the polling booth”.
Come 2019.gonna vote For NOTA. Not born to keep paying taxes Fo https://t.co/ieLnZ4BCBb farm loan waiver, we will pay tax.Collect lower than expected in Gst, we will pay extra tax.Done wit this shitty govt which did nothing Fo middle class Fo last 4yrs.was a Bjp voter since 10yrs
— Shreenidhi P (@nid_rockz) February 1, 2018
I am not going to make an effort to goto polling booth itself.. Simply meaningless.
— Vikas G. Joseph, CFA (@vikasgj) February 1, 2018
Leading commentators also expressed despair at the levy of tax on LTCG.
Also isnt it painfully ironic that the white skin FII’s coming from Mauritius gets a tax free status on their stock investments whereas the brown skin middle class which voted @BJP4India and @narendramodi to power is being taxed all over?
— Basant Maheshwari (@BMTheEquityDesk) February 1, 2018
Absolute joker. Ltcg without indexation? So pay tax on inflation?
— Subramoney.com (@pvsubramanyam) February 1, 2018
Sensex crash is ‘No Confidence Motion’ against NAMO: RaGA
RaGa tried to take advantage of the rage amongst investors to take a dig at NAMO.
“In Parliamentary language, the Sensex just placed a solid 800 point No Confidence Motion against Modi's budget,” he quipped.
In Parliamentary language, the Sensex just placed a solid 800 point No Confidence Motion against Modi's budget. #BasEkAurSaal
— Office of RG (@OfficeOfRG) February 2, 2018
However, some seasoned investors were not impressed by RaGa’s potshot.
Hello @OfficeOfRG In the language of Brokers that you understand better than the language of Parliamentarians Sensex just laid a 800 point bear trap.
Thok lo aur… Keep Short selling India & Sensex will take away pants. #BasEkAurSaal fir #CongressMuktBharat likh ke le lo! https://t.co/NYo8HVdHhT— Sushil Kedia (@sushilkedia) February 2, 2018
In parliamentary language,the #Nifty moved from 7800 in Dec 2016,to 11000 and beyond in Jan 2018!In unparliamentary language,you first need to figure out #Sensex from #Nifty,before you tweet on markets and yes,your gibberish is not even funny anymore:) #Modinomics works! https://t.co/SdjdNPNzMu
— Sanju Verma (@Sanju_Verma_) February 2, 2018
He is talking about no confidence motion when sensex has fallen just 800 points. Why didn't he open his mouth when sensex was scaling new and higher peaks after peaks, 35-36k which would have never happened during their term.
— Nita Kewl (@Nitzmatazz) February 2, 2018
Sensex 2014 – 28822.37
Sensex 2018 -35,066.75अब जाकर आलू से सोना बना बहना।#RgKaro2024TakIntezar
— SUDIP YADAV (@sudip_lko) February 2, 2018
Not taxing capital gains so far was an anomaly: Ridham Desai
In sharp contrast to the eminent experts who are despairing over the levy of tax on LTCG, Ridham Desai welcomed the levy of LTCG tax.
He explained that capital gains is nothing but a deferred form of dividends and that not taxing capital gains while taxing dividends incentivize companies to reduce the dividend payout, thereby reducing the taxes.
“If you are taxing dividends, you have to tax capital gains because capital gains is nothing but future dividends. It is an anomaly that you tax dividends. So, you are incentivising firms to delay all dividends. Don’t pay dividends because dividends are taxed, arbitrage them because capital gains are not,” Ridham said.
“So, it is fair to bring capital gains under taxation. There should not be any independent income stream which is not subject to tax,” he added in a firm tone.
Levying both STT and LTCG Tax is not an anomaly
Ridham further explained that, contrary to the opinion expressed by leading experts, there is not much anomaly in levying both STT and tax on LTCG.
He pointed out that the persons who pay STT (day traders) are very different from those who pay capital gains tax (investors).
He also emphasized that the STT that investors pay on delivery transactions is a nominal amount and unlikely to pinch their pocket.
Ridham also opined that abolishing STT may be counter-productive because it would encourage rampant day trading, which is obviously undesirable.
Sensex & Nifty crashed because of global issues, not due to LTCG
Ridham cleared the air that the crash in the Sensex had nothing to do with the LTCG tax. Instead, it was the result of global weakness.
“FPI flows are not a function of just India. So, there is an emerging market angle to it. If the SGX is down this morning, then it is nothing to do with budget. So, we should not fall in this trap. In fact, 80-85 percent of what Nifty does in next three months is nothing to do with India. So, we can keep printing our growth numbers, capex, the market will do its thing because the Dow Jones will do its thing. If Dow goes down, Nifty it about to fall. It doesn’t matter. In this earning season, three out of four companies have surprised the analyst yet only one out of three stocks has gone up after the earnings. The market doesn’t want to go up. There is pressure on the SGX and nervousness in global equity markets. So, there is no bid left here.”
Don't think #Budget2018 is triggering a correction in the market', says Ridham Desai of Morgan Stanley @CNBCTV18News @latha_venkatesh pic.twitter.com/QYQ3cj7CXe
— CNBC-TV18 News (@CNBCTV18News) February 2, 2018
Ridham Desai says that #Budget18 is not spoiling indian markets. It is all global corrections. Buy these corrections. Be long term
— #RenukaJain, FCA ?? (@RenukaJain6) February 2, 2018
US/European Markets crash on #IndiaBudget2018
How banal an argument.
Indian market correction has nothing to do with the Budget, we are part of global ecosystem and thats driving the correction.— sandip sabharwal (@sandipsabharwal) February 2, 2018
Ridham’s theory that the crash in the Sensex has nothing to do with the Budget or the LTCG tax is corroborated by the fact that yesterday the Dow Jones Index also slumped a massive 666 points, i.e. nearly 3%.
The Dow dropped 666 points, capping the worst week in two years. Here's a look at what's going on.
1. Concerns the Fed will raise rates
2. Rising interest rates
3. Worries about the bond market
4. Politics
5. Cooling-off after recent stock rises https://t.co/AJWXNtECk0 pic.twitter.com/GAgt7PLDPv— CNN (@CNN) February 2, 2018
A drop of more than 600 points in the Dow is very, very rare https://t.co/7TCyEKceEZ pic.twitter.com/aJIOauPFuk
— CNBC International (@CNBCi) February 2, 2018
FUCK THE DOW JONES
— The Iron Sheik (@the_ironsheik) February 3, 2018
LTCG tax will not impact the decision of the FIIs to buy stocks
Ridham rubbished fears that FIIs would desert India because of the LTCG tax.
He explained that investors’ decisions are primarily driven by expectations of the returns that they can milk out of an investment.
“If somebody told that markets are going up 25 percent in next one year then I will worry about the tax later and first buy the market. I don’t think India loses out on account of it,” he said in a soothing tone.
Amazing how all of us survived from 1993 to 2003 when Sensex gave zero returns and LTCG was around.
— Anupam Gupta (@b50) February 2, 2018
Economy is on a solid footing, buy stocks
Menaka Doshi finally cornered Ridham and asked the most important question.
“Do you think economy is on a solid uptick?”
“The economy is on a solid footing,” Ridham replied with a big smile on his face, sending the clear signal that we should take advantage of the correction to buy stocks aggressively.
Foreign inflows will not be deterred by LTCG Tax: Akash Prakash
Akash Prakash of Amansa Capital, a FII, provided authoritative confirmation that “LTCG will not change flows into India in a very meaningful manner”.
He also assured that there is “lot of steam in Indian equity market”.
#Exclusive | In an interaction with ET NOW's @nikunjdalmia, Akash Prakash of Amansa Capital laid down his analysis on #Budget2018. Here's what he said: pic.twitter.com/qKwobGoW64
— ET NOW (@ETNOWlive) February 2, 2018
Hugh Young of Aberdeen Asset Management opined that while the LTCG tax makes India a less attractive destination in the short-term, it is unlikely to have much impact in the long term.
“It could well be acceptable. It is just a matter of calculating mathematically. It makes India marginally less attractive by definition. So, if you do lose 10% of future gains from today, it would cause people to step away from India a bit. But I do not think it will have any great effect on what we do in India,” he said.
He also opined that “relatively India looks a safer bet than many other markets,” implying that foreign investors have no option but to come to India despite the LTCG.
Conclusion
The writing is clear on the wall that we don’t have to despair the levy of LTCG tax or berate NAMO or Arun Jaitley. Instead, we should treat the correction as a golden opportunity to tuck into high-quality stocks at lower valuations. Then, when the dust settles and the shock over LTCG tax becomes a distant memory, we will be able to bask in riches!
Most Tax hungry Govt in Indian History , collecting Taxes to drain in Toilets. This Govt has worst record in term of Bad delivery, it does not know where the tax is going. It sucked several lakh Crores from Indian public by taxing heavily on petrolium products and wasted all that in drain, without any Devolpment on surface. This Govt is full of bad ideas for destruction of Indian Economy, it may be thoughtless Demonetisation, poorly implemented GST or heavily taxing Indian public. Many new investers who come late has lost every thing in this Modi Made Destruction. I fell flowers to mutual finds may slow down resulting in reduced liquidity, which will adversely impact stock market in Long term. Ridham Desai is known Modi Bhakt, has never said a single world against any Modi policy. We should thank our constituent assembly, which made Loksabha term for only five years. If they had given 6 years, Modi may have taxed on Child Birth, Funeral, and who knows on breathing itself, saying air is natural resources so need to be taxed. This Modi Govt needs to be Not only Booted out,but must be reduced 22 seats in 2019 half of what Congress got in 2014.Modi want to convert every Stock invester to Pakode Seller.
Kharbji,
Hope you made enough money when sensex roared from 14k when modi sworned in, to 36K . Now whats the problem in paying a little tax on huge money we made ? It shows typical Indian mentality where only 1% of Indians pays taxes . If you compare indian Taxation system with western world.. India is a Tax heaven .
So please stop cribbing and start paying taxes which are used for nation building .
Thanks & Regards,
Prashant
Dear Prashant , I am among the top Tax Payers in my City, so it is not case of starting paying Tax.
Something wrong with the facts in these comments. Sensex was at 24000 on 13th May 2014, the day before declaration of results.
many nice comments. But question is do MPs pay taxes? Do SC judges pay taxes? No they get tax free salary. Plus perks, tax free. Let them pay taxes too! The canteen rates in Parliament is like road side pakoda vendor rates. So this hurts. They increase their salary, but decrease output by brawling. No use saying it is done by Cong. Last term when congress ruled, remember what BJP did? No body is against paying taxes. But do not take exemption for yourself and ask people whom you represent to pay taxes. Is it not a joke?
With this Worst Budget of Indian History, Stock market will survive on strength of Indian Enterpenures and on expectations of Change of Govt in 2019 as Indian Jobless Youth would not like to Sell Pakodas, but Modi will be wiped out and his Govt will be drained in Toilets.
Really angry, Kharb!
kharb sir, our present govt is uneducated, blind leading another blind story…demonitization was the biggest scam and divided India. Then taxing everyone in whichever way possible.
Ridham Desai, represents Morgan Stanley. Our current breed of investment experts(???) on TV who had already declared on 1st Feb that negative effect of LTCG Tax was only momentary may not be aware that MS was the first Foreign MF to enter India in 1993. Where is it now? How far behind the subsequent entrants? That’s the credentials of Desai & Co. Why such great reverence to him? It was UDAYAN MUKHERJEE who was on dot while pointed out to Soniya who was highly excited about the recovery on B-Day that the recovery was most likely stage managed and the true picture will emerge tomorrow. How true!!! Kudos to Udayan. In the current scenario what would retail investor do. After seeing the blood bath in last 15 days on mid-cap and small cap front, his gains would have eroded almost 25-30% by now. He would probably contemplate redeeming his units and booking his profit. Further, with tax on dividends coming up, MF industry will declare generous dividends to strip part of the tax free gains. This may aggravate sales, leading to further fall.
I agree with you. MS completely exited its equity business in India. I wonder what this gentleman has to say about that.
All the channels who were saying about the benefits of LTCG are suddenly criticizing the move
Is it not surprising that the focus is on LTCG,not on future growth in the economy and equity market which in my view shouid be of prime interest ?
All LTCG detractors… Haven any one of u bought PC Jewellery st 175, 200, 220 and odd levels on Friday? If not, stop unwarranted posts here and sharpen your investing skills.
I am from Andhra Pradesh. I am anguish like any other citizen of A.P about the step motherly treatment meted out to the new born state by the present government. The P.M goes on auction like show in electionbrally increasing his offer of assistance to the state of Bihar from 70000 lakb crore to 150000 lakh crore on election eve, but doesn’t care about implementing state bifurcation act and the promises made by the then prime minister in the August parliament session are not cared for too. But this is not the forum to show our anger on issues not related to the forum.
LTCG tax introduction is very simple. If the Stock market crashes further and the recovery is not more than what the value was on 31 January 2018, then goodbye Jaitley and Modi.
I loose money, you loose power.
Very simple and unfortunate Modi could not understand such simple psychology. Very dissapointed that he may have become disillusioned, thus ignorant, sadly arrogant, and therefor committed a severe blunder. I am an open supporter of Modi. Enthusiasm is what wins elections. You do not, and I repeat DO NOT, suck the air out of die hard voters.
Lastly the timing is mind boggling. A year before the election, you introduce such an unnecessary attack on investors. Common Modi. Even a 5 year old, even Rahul Gjandi for goodness sakes would know better. Wow! What a shame. India really needed Modi for a long time. Very sad, and I feel very sad for India. I love this country and every Indian. So sad to see what Modi has done. The majority is gone, hopefully not the victory for 2019.
modi which is your next foreign trip? after taxing us you need one good break, dont you!!-
There are many upcoming foreign visits of PM Modi in 2018 which includes Switzerland, Palestine, UAE, China, Singapore and so on.hail modi…enjoy yourself 😉
Even trump doesnt travel so much. All my tax money spent on bjp worldtours…
Modiji doesnt travel for fun. He is a serious businessman. He has to give returns on the investments made by the crony capitalists Adanis, Ambanis, Bachchans, Devgans etc during the last election, and secure the same for next elections and all the other state elections in between. Wherever he goes, he secures business contracts for the real rulers of India, the Ambanis and the Adanis. Just see how he ‘secretly’ went to France, agreed to buy the Rafael jets at 2.5 times the price that the previous govt had negotiated, then he dumped the Navaratna Hindustan Aeronautics in favour of a new baby Ambani company in Aerospace! It was so secret that even our defence minister goes on record saying she doesnt know it!!!
Got the point?
BTW, I am not against LTCG per se. Though the FM has denied indexation (I think he will restore it during the finance bill discussions in Parliament), I was surprised he gave a grand-fathering of cost of acquisition. That was so rich-man-friendly!
I am more disturbed for not raising the IT exemption limit. Its nonsense to tax the middle class for income upto Rs 10 lakhs, when the rich farmers with crores of income pay zilch. Also, the politicians manage to avoid the same, helped by our governments.
And finally, this govt will get no LTCG tax next year since the markets will be down by 20-30% from 31 Jan 2018 levels, just to recover back to that grand-father level, they have to recover by 25-40%!!! That looks doubtful with CAD worsening, GDP not rising, employment not rising plus global investors going after higher interest bonds than the bloated equities.
Cheers.
Vote NOTA if you are unhappy. Dont skip voting. Let NOTA command 10% vote share, will send a good message to all corrupt and greedy political parties.
Prime Minister Narendra Modi, his mantris spent Rs 567cr on foreign trips just in in 2015-16 the total tour expenses of the PM and his ministers went up from Rs 269 crore as estimated in the budget at the beginning of the 2015-16 fiscal to Rs 567 crore, as per the revised estimates towards the end of the year. In addition, the total tour expenditure of bureaucrats was over Rs 1,500 crore in the three years up to 2014-15.https://timesofindia.indiatimes.com/india/Prime-Minister-Narendra-Modi-his-mantris-spent-Rs-567cr-on-foreign-trips-in-2015-16/articleshow/51486086.cms acc to wikipedia he also has a trip to Argentina and south Africa this year ….https://en.wikipedia.org/wiki/List_of_international_prime_ministerial_trips_made_by_Narendra_Modi#Future_visits……
You can see Fraud on public by this BJP Govt which is just after taxing middle Class , when unlimited Calls with 1GB data is available at less than 500 for three months, all MPs are drawing 15000 per month as telephone allowances . Why don’t Govt give them Rel Jio or other Mobile plan which will cost only 150 Rs per month or 1% of their allowance. Similarly Minsters are drawing more than that. Similar is situation at state levels which are mostly ruled by BJP. Modi just want to Squeeze Middle Class
Few years just their foreign trips will mark 4000crores.daylight robbery this is….
absolutely right. Tremendous amount of money spent for foreign trips
Kharbji,
this day light robbery by MPs is happening for decades .. and its not becuase of Modi .
Regards,
Anger of Investors , who lost money!!!! With approach of ‘Make my income tax free so can recover loss or turn in to profit.’
Hi,
please check whats the PE of the market.. it was not at all sustainable .
Market has ran up too much fast ahead of time . It was looking for reason to correct . Market moved for 14k to 36k in just 4 years .. not sure which investors you are referring who lost money in Indian equities ….
Thanks
why not, kyonki saas bhi kabhi bahu thi….
Fwd as received
http://www.sundayguardianlive.com/news/12638-cabal-plans-october-meltdown-share-prices-rout-bjp
For the sake of 20K crores of LTCG, wiped off 500K crores of investors wealth in a day. If Nifty gives negative returns this year, govt would get zero crores of LTCG but for sure destroy several lacs of investors wealth.
You are exactly right Krish ji. The sad thing about Indian Government is that, none in the ministry is able to roll their brains. Perhaps the people of India started doing so and they will continue to do so. As Kharbji mentioned somewhere is this site “this is tax hungry government . I could not see any sort of distribution of revenue collected in the form of taxes in recent years. Where is this money going? to
Udayan Mukherjee was dot on.
Anyway market had run too fast without taking pause and without improvement in fundamentals.
Every bad news was boughy with liquidity.
So probably correction was awaited.
Hi All
i use to view this website because I thought there were some really good people who use to give insight about stocks and economy. But unfortunately it has now turned into pathetic Congress vs Bjp .. at the time of congress bakwas panti hoyi and bjp time pe bhi but expectation was as an group we could help each other to overcome both scenario and spend on focusing on stocks instead of talking political issues…pathetic scenario
Dear Devesh, We fully agree that we should not discuss politics here, but don’t you think we should discuss Govt Economic policies like Budget, which affect Stock market.More over if we shall not discuss our views on Govt Economic policies , how Govt will know, what investers feel. But yes some time you may find some irrelevant political comments which are not treated to Economics, those can be considered as genuine unintended errors, as Economy and Politics are so much interrelated. Any way more care needs to be taken by every one so that due care is taken for Genuine Feeling like yours.