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India's Key Stock Index Drops by Most Ever

Thursday May 18, 8:07 am ET

India's Key Stock Index Posts Biggest Point Drop Ever, Falling 6.8 Percent

BOMBAY, India (AP) -- India's benchmark stock index posted its biggest point drop ever on Thursday, tumbling 6.8 percent largely due to fears of higher taxes on foreign funds that invest in Indian stocks.

The Bombay Stock Exchange's 30-share Sensex fell to 11,391 points, down 826 points. On the rival National Stock Exchange, the 50-stock S&P Nifty closed at 3,389, down 246 points, also 6.8 percent.

Some of the drop was attributed to declines on global markets, but some brokers said the biggest trigger came from a vague notice in a government circular that some feared could lead to higher taxes on foreign funds that invest in Indian stocks.


Foreign funds have invested billions of dollars in India's stock market, driving its current rally that began in April last year. The Sensex has since soared more than 100 percent.
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