(Adds closing levels)
By Sethuraman N R and Bharath Rajeswaran
BENGALURU, Feb 1 (Reuters) - Indian shares reversed
earlier gains to close lower on Wednesday, led by a fall in
insurance companies after the country's Union budget proposed to
limit tax exemptions for insurance proceeds, while Adani Group
shares tumbled.
The bluechip Nifty 50 index closed down 0.26% at
17,616.30, its biggest slide on budget day since a 2.51% fall in
2020. However, the S&P BSE Sensex rose 0.3% to
59,708.08.
The benchmark stock indexes rose as much as 2% earlier in
the session after Finance Minister Nirmala Sitharaman raised the
rebate limit for personal income tax to 700,000 rupees ($8,550)
from 500,000 rupees.
But they reversed gains after Sitharaman later proposed a
tax on the total returns upon maturity of life insurance
policies, except ULIPs, issued on or after April 1, 2023, if the
aggregate premium of such policies was more than 500,000 rupees
a year.
"Life insurance players witnessed heavy selling as the
budget pushed for the new tax regime, making insurance products
less appealing as a tax-saving tool," said Vinod Nair, Head of
Research at Geojit Financial Services.
HDFC Life , SBI Life Insurance , ICICI
Prudential Life Insurance Co , Life Insurance of India , General Insurance Corp and Max Financial tumbled between 8.5% to 12.5%.
Shares of Nifty 50-listed Adani Enterprises plunged 28.2% while Adani Ports and Special Economic Zone tumbled 19.2% as the selloff in Adani Group resumed to
take the total losses to $84 billion since the Hindenburg report
one week back.
Public sector (PSU) banks sank as much as
9.5%, before recouping some losses to close down 5.7%, making
them the biggest loser among the 13 major sectors.
Metal stocks closed down 4.5%, mostly
dragged by the slump in Adani Enterprises.
Meanwhile, Indian investors will closely watch the outcome
of the U.S. Federal Reserve meeting that could signal an end to
interest-rate hikes at its meeting later in the day. ($1 = 81.8680 Indian rupees)
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Nifty 50's performance on Budget days Nifty 50's performance on
Budget days ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Bharath Rajeswaran and Nallur Sethuraman in
Bengaluru)
+919769003463))
