Sensex, Nifty Seen Lower After Modi's Tax Remark

(RTTNews) - Indian shares look set to open lower on Monday as confusion persists over Prime Minister Narendra Modi's statement on Saturday that market players should contribute to the national exchequer.

Speaking at the inauguration of the NISM campus near Mumbai, Modi said that "those who profit from financial markets must make a fair contribution to nation-building through taxes."

However, Finance Minister Arun Jaitley later clarified that Modi's statement on tax was misunderstood by some sections in the media and the government has no intention to impose tax on long-term capital gains on security transactions.

Last week, the benchmark BSE Sensex dropped 448.86 points or 1.69 percent to post its biggest loss in five and the broader Nifty index tumbled 153.70 points or 1.89 percent to end below the psychological 8,000-level, as investors fretted over the impact of demonetization and the delay in the rollout of the GST on growth.

Asian markets are subdued in thin holiday trade, with Chinese shares suffering heavy losses after China's President Xi Jinping admitted that China's economic growth will slow below the government's 6.5 percent target.

The benchmark Shanghai Composite index is losing 1.3 percent while Japan's Nikkei index is marginally lower as trading resumed after a long holiday weekend.

Markets in Seoul and Taiwan are marginally higher. Crude prices held steady after settling at their highest level in 17 months on Friday. The dollar dipped against the yen.

U.S. stocks posted modest gains in thin trading on Friday, although the Dow again fell short of 20,000 points on the last trading day before the Christmas holidays.

The Dow and the S&P 500 inched up about 0.1 percent on the back of upbeat new home sales and consumer sentiment data, while the tech-heavy Nasdaq rose 0.3 percent.

European stocks closed roughly flat in light pre-holiday trading on Friday, with banks in focus, after Deutsche Bank and Credit Suisse settled fraud suits with the U.S. government and the Italian government agreed to a bailout of Monte dei Paschi di Siena.

The pan-European Stoxx Europe 600 index closed 0.04 percent higher. The German DAX slipped 0.1 percent, while the U.K.'s FTSE 100 and France's CAC 40 index inched up 0.1 percent.