Sensex falls over 650 points. Mauritius link and 5 other factors behind the selloff
Nifty also shed nearly 1% with foreign investors believed to have offloaded stakes in bluechips as those investing from Mauritius may now face greater scrutiny. Smallcaps and midcap indices were largely unaffected in today’s sell-off.
Within the Nifty family of 50 stocks, Sun Pharma fell around 4% while Maruti Suzuki, Titan, Cipla, JSW Steel, Power Grid and ONGC were trading around 2% lower. Pharma stocks with the biggest loser with Nifty Pharma retreating by around 1.5%. All sectoral indices were trading in the red.
Nifty Bank, which had scaled 49,000-mark for the first time, was also trading weaker by about 0.8%.
Today's selling pressure comes after Sensex zoomed past the 75,000 mark on Tuesday and the market capitalisation of all listed stocks on BSE achieved the new milestone of Rs 400 lakh crore on Monday.
Here are 6 key factors behind the fall in Sensex, Nifty today:
1) Pressure from FPIs
The single biggest worry for foreign investors at the moment could be the inking of a protocol to amend the India-Mauritius tax treaty after which FPIs could face greater scrutiny.
The amendment specifically states that relief under the treaty cannot be for the indirect benefit of residents of another country. In almost all cases, the shareholders or investors in Mauritius entities making investments in India are from other countries.
Mauritius is the fourth-largest source of FDI in India and owns about 6% of total FPI assets in the country.
Also read | Govt ends easy tax relief for Mauritius-based FPIs
2) US
