Hopes for status quo on capital gains tax After a 5.4% retreat for the Bombay Stock Exchange's 30-stock Sensex in the past week amid concerns over rising inflation and interest rates, the setting is perfect for a sharp swing in either direction and the budget is expected to provide the trigger this week. Market participants may not have a long wish list for Chidambaram, but they are certainly hoping that he leaves a few issues unaddressed. There are two thorny issues really, to which investors are extremely sensitive and desperately want a status quo on - one is the capital gains tax and the other, participatory notes. One of the factors that contributed to the stock markets' remarkable bull-run was the finance minister's move two years ago to cut capital gains tax on investments held for less than a year to 10% and abolish the tax altogether on investments held for more than a year. Any reversal in his position on this tax will disappoint traders and hurt trading volumes. The issue of participatory notes, or PNs, is more potent. PNs are contracts issued by brokerages to overseas investors (including hedge funds), who aren't or wouldn't like to be registered in India, to invest in local shares. It is estimated that anywhere between 40-60% of foreign holding in Indian stocks is via PNs. Several times in the past, there has been speculation that government officials and regulators are unhappy with PNs' existence, as they hide the identity of the real owners of such a large chunk of shares. And every time the speculation surfaced, the markets tanked, forcing a clarification from the government. Pans still are a touchy issue with the markets, and any move to ban them could force a sharp correction. http://www.marketwatch.com/news/sto...x?guid={E4A549B0-B0D5-4553-B182-3DDE77819C48}
i hope they reverse but the fall in stock markets started with india first and today it is big fall in china markets. more than 8% in one day , largest fall in a decade. Seems a very heavy profit taking. Till china and indian markets dont break their highs, now I would be afraid of market.
I'm about to start trading futures. Basically YM, ES and NQ. Anyone from India trading US stocks or futures. Do we need to register with RBI or some other entity. I'm an indian by birth and stay in India. Thanks
I think last year the Indian Stock Markets took a dip of about 10% in one day. Maybe I am wrong about that figure, but it was a significant drop. The markets went on to correct itself and then moved up again. My bias is towards the long side for China and Indian markets. Like all healthy bull markets, they need corrections to shake out the weak longs. Again, trade the charts. For now, it looks like a falling knife, so be careful. I have found the MACD to indicate nice bottoms for these markets. Good luck.