(Bloomberg) -- Indian stocks fell, reversing early gains, as the country's prime minister said more people should be paying tax.
The S&P BSE Sensex dropped 0.2% to 38,310.49 in Mumbai, after rising as much as 0.4%. The NSE Nifty 50 Index declined 0.1%.
Indians outside of the tax net with taxable income should come forward to pay taxes on their own, Prime Minister Narendra Modi said Thursday at an event in New Delhi. The benchmark stock index erased gains as his comments were reported.
“With a big setback to business activity and consumer spending, the government will need to find ways to bolster its revenues,” said Sameer Kalra, an investment strategist at Target Investing in Mumbai. “Taxes could be one way to do that.”
Read: Modi Says More Indians Should Come Forward to Pay Tax
With business activity stifled by lockdowns to curb the spread of coronavirus, tax collections are dwindling even as the economy relies on government spending to cushion what's expected to be the first annual contraction in 40 years.
The rupee was little changed at 74.8450 per U.S. dollar, while the yield on the 10-year bond rose one basis points to 5.90%.
As earnings season continues, 25 of the 40 Nifty 50-member companies that have announced results so far have beaten or matched estimates.
The Numbers
- Six of 19 sector indexes compiled by BSE Ltd. declined, led by a gauge of telecom companies
- Bharti Airtel Ltd. contributed the most to the Sensex decline and had the largest move, decreasing 2.4%
- Larsen & Toubro Ltd. provided the biggest boost to the index and had the largest gain, advancing 4.3%
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