MARKETS STTINGED

Bloodbath wipes out ₹9.4-lakh crore investor wealth

- ANANYA GROVER & JOYDEEP GHOSH

THE STOCK MARKETS were caught off guard on Sunday after the Union Budget sharply raised the securities transaction tax (STT) on futures and options.

The worst Budget-day performance since 2020 wiped out ₹9.4-lakh crore in market value.

Finance Minister Nirmala Sitharaman announced a steep hike in STT on derivatives, proposing to raise the levy on futures to 0.05% from 0.02%.

The STT on options premium and on the exercise of options was increased to 0.15% from 0.1% and 0.125%, respectively — translating into hikes of up to 150% in some segments.

THE ANNOUNCEMENT SPARKED an immediate selloff. The Sensex at one point plunged over 2,000 points before closing 1.88% lower, down 1,546 points at 80,722.

The Nifty shed 495 points to end at 24,825.

Market participants were split on the move. Some warned that the higher tax could accelerate foreign capital outflows, particularly from high-frequency and arbitrage traders, while others argued that the hike was necessary to curb excessive retail speculation in the derivatives market.