Sensex falls 1,500 points intraday, closes flat; caution over valuations
equity benchmarks ended flat on Tuesday following a roller-coaster session as investors took concerns over the increase in taxes on stock market transactions in their stride.
The Nifty ended 0.12%, or 30.20 points, lower at 24,479. The Sensex declined 0.09%, or 73.04 points, to 80,429.
Money managers said the undertone will remain cautious owing to the high valuations.
«Given the slight disappointment on capex and the increase in capital gains tax structure, the Nifty is expected to consolidate between 23,700 and 24,500 levels in the near term,» said Nikhil Ranka, CIO, equity alternatives, Nuvama Asset Management. «The near-term valuations look rich, and the upsides seem capped.»
Mid-cap and small-cap stocks also ended weak. Out of the 4,015 stocks traded on the BSE, 1,680 advanced, while 2,223 declined.
«The valuations could potentially correct post the budget if the flows are impacted due to changes in the capital gains tax measures and also the fact that budget falls short on any direct demand boosting measures especially in the rural economy,» said Chirag Mehta, CIO, Quantum Mutual Fund. «The markets could probably see a correction or move sideways similar to the last time that the long-term capital gains tax structure was changed.»
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