The benchmark Nifty dropped 88.80 points -- the biggest fall in two months -- following a massive plunge in FMCG major ITC stock triggered by the GST Council's decision to hike tax on cigarettes. Trading sentiment was also affected by weak global cues. Key indices witness a selling pressure throughout the session to end lower amid profit-booking largely seen in FMCG, energy and realty stocks. Cigarette major ITC lost 12.49 per cent after the Goods and Services Tax (GST) Council yesterday increased the compensation cess on cigarettes by 48.50 paise to 79.20 paise per stick. Overseas, most Asian markets ended mixed as setbacks for a health care overhaul in the US raised doubts over prospects for a range of reforms backed by US President Donald Trump. While, European stocks were trading lower as oil and financial stocks declined. The Nifty opened lower at 9,832.70, hovered in a range of 9,885.35 and 9,792.05 before ending at 9,827.15, a sharp loss of 88.80 points, or 0.90 per cent. .
Four cigarette stocks tanked by 3.63% to 11.51% at 10:10 IST on BSE after the Goods and Services Tax Council yesterday, 17 July 2017, increased the compensation cess on cigarettes by 48.50 paise to 79.20 paise per stick with effect from 18 July 2017.
The GST Council on Monday stepped in to check the windfall being reaped by cigarette manufacturers and increased the cess by 48 paise to 79p per stick, although the impact on prices is currently unclear.