Sensex falls 248 points on profit booking in opening trade

The benchmark BSE Sensex dropped by 248 points in early trade today due to profit booking by investors amid weak Asian cues.

Brokers said Prime Minister Narendra Modi favouring increasing tax contribution from various market participants in a "fair, efficient and transparent way", too triggered selling in early trade.

The 30-share barometer declined by 248.45 points, or 0.95 per cent, to 25,792.25 with all the Sensex constituents trading in the red. The index had gained 61.10 points to settle at 26,040.70 points in the last session.

All sectoral indices led by metal, infrastructure, banking and PSU fell up to 1.03 per cent.

The NSE Nifty was also trading lower by 79.20 points, or 0.99 per cent, at 7,906.55.

The Prime Minister last week favoured increasing the tax contribution from various market participants in a "fair, efficient and transparent way" and promised more "sound and prudent policies and reform measures".

Asking the regulators and taxmen to think about the contribution of market participants to the exchequer, Modi said had said that the low contribution of taxes may be due to the structure of tax laws. "low or zero tax rate is given to certain types of financial income," he had said in Mumbai.

However, to assuage market fears, Finance Minister Arun Jaitley yesterday said that there was no move to impose long-term capital gains tax on share transactions, an issue investors are hugely touchy about.

Apart from profit booking and sustained capital outflows by foreign funds, weak trends in other Asian bourses mainly dampened the sentiment.

In the Asian region, Japan's Nikkei shed 0.09 per cent, while China's Shanghai Composite Index fell 0.74 per cent in early trade today. Hong Kong, Singapore, Sydney, Kuala lumpur, Wellington and Jakarta financial markets are closed today for a public holiday.

The Dow Jones Industrial Average ended 0.07 per cent higher in Friday's trade.