The NIFTY 50 slid as investors processed a ₹2.85 lakh crore fiscal hole, sparking concerns that a cut in long‑term capital gains tax could reinvigorate foreign inflows.
ICICI Securities analysts note that the shortfall dwarfs the ₹72,249 crore raised from LTCG last year, a 28.6% YoY drop.
The RBI has already spent $67 billion in the past eight weeks to shore up the rupee, tightening liquidity for equity buyers.
Madhavi Arora, chief economist at Emkay Global, warns that a $50–55 billion net outflow could keep the rupee under pressure, pushing market sentiment lower.
If the government proceeds with an LTCG cut, the NIFTY 50 could see a short‑term rally, but analysts caution that the underlying fiscal risk remains a drag.
The next earnings cycle will test whether fiscal tightening or relief can tilt the market; investors should monitor RBI’s liquidity stance and the upcoming fiscal policy announcement.