Foreign Institutional Investors Retreat from Equities Following Budget 2024 Capital Gains Tax Adjustments

Foreign Institutional Investors (FIIs) have started to pull back their holdings from equity markets as a response to the recent tweaks in the capital gains tax announced in the Budget 2024. This shift marks a significant change in investment strategies post-budget announcement, impacting stock performance across various sectors.

Impact of Capital Gains Tax Revisions

The modifications to the capital gains tax regime have led to a reassessment of investment portfolios by FIIs, leading to a reduction in their equity positions. These changes are viewed as efforts to increase tax revenues, but they have introduced a level of uncertainty for foreign investors. This uncertainty has resulted in a diminished appetite for equities and increased sales in the market, potentially affecting the stock prices of major companies.

Alphabet Inc. Under the Spotlight

Among the affected stocks, Alphabet Inc. GOOG, the parent company of Google, has experienced market volatility. Alphabet, a multinational conglomerate and one of the world's largest technology companies, has seen its stock react to the broader sell-off initiated by FIIs. The company, renowned for its leadership in the tech industry and significant revenue generation, has had to navigate the choppy waters of policy-induced market fluctuations, like many of its peers.

Alphabet Inc. was founded on October 2, 2015, restructuring Google and becoming its parent company along with several other subsidiaries. It continued to retain its original co-founders as major stakeholders and key executives. Positioned as the world's fourth-largest technology company by revenue, Alphabet Inc. has been one of the most valuable entities in the market, and its stock performance is closely watched by investors globally.

FIIs, equities, capital_gains_tax