ITC shares fall 3% post-UP tax hike

UP govt last Friday increased taxes on tobacco products from 12.5 to 50%.

Written by Agencies | Mumbai | Published: July 2, 2012 8:15 pm

Shares of ITC today closed over 3 per cent down as investor sentiment turned poor after the Uttar Pradesh government last Friday increased taxes on tobacco products from 12.5 per cent to 50 per cent.

Shares of the FMCG giant slipped 3.42 per cent to Rs 250.10 on the BSE. During the day,the stock lost 4.34 per cent to Rs 247.70. At the NSE,the stock closed 4.21 per cent lower at Rs 248.

This marks a reversal of fortunes for ITC shares which today had in fact hit a 52-week high of Rs 260.20.

ITC,the most influential stock in 30-share Sensex pack,was the biggest loser among the BSE benchmark index constituents today.

“ITC shares fell in a knee-jerk reaction to reports that Uttar Pradesh has raised taxes on tobacco products,” CNI Research CMD Kishore Ostwal said.

The state government on Friday increased tax up to 50 per cent from existing 12.5 per cent.

Earlier in Uttar Pradesh,the tax summed upto 18.5 per cent along with additional tax and entry tax but now it tallies up to almost 55 per cent.

Meanwhile,the BSE benchmark index Sensex ended at 17,398.98,down 31 points.

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