Indian stock markets took a dip hit on Monday as selling pressure intensified in metal, pharma and realty shares. The Sensex fell 234 points to end at 25,807, its lowest level since November 21, 2016 and the Nifty closed 77.5 points lower at 7,908.25.
During the intraday trade on Monday the Nifty fell as much as 1.15 per cent to 7,893.80, a seven-month low, as investors fretted that the government may impose long-term capital gains tax.
Prime Minister Narendra Modi said on Saturday that people in financial markets must make a "fair contribution" to nation building, comments that were seen as setting up the prospect of higher taxes for investors.
However, Finance Minister Arun Jaitley clarified on Sunday that the government did not plan to impose long-term capital gains tax, though that was not enough to prevent selling on Monday.
"It (reaction to PM's comments) is a knee-jerk reaction," said Gaurang Shah, vice president, Geojit BNP Paribas.
"The fact that we have broken certain levels since Brexit day low, could be spooking markets further."
Among individual sectors, metal and realty stocks were the biggest hit with their respective sub-indices falling 3 per cent and 3.64 per cent respectively.
Nalco, Hindalco, JSPL, MOIL, Vedanta, Hindustan Zinc were the prominent losers in the Nifty Metals index falling between 3-5.5 per cent each. Meanwhile, DLF ended 7.56 per cent lower at Rs 105.15 to become the top loser in the Nifty Realty index.
Among the 51 Nifty stocks, only 5 shares ended in green while 46 shares closed with losses. Hindalco was the top loser in Nifty , down 4.9 per cent followed by Cipla and Bank of Baroda, which fell 4.7 and 3.7 per cent respectively. Meanwhile, Hindustan Unilever was the top gainer in Nifty, up 1.56 per cent followed by TCS and Bharti Airtel.