Why stock Market are crashing heavily ?

Hi Friends as you all know on the day of the budget I have clearly told you all that budget is not good for stock market don't buy anything just sell what you have if you are a trader told on the day of budget 5th July after that market has fallen 1300 points hope you all those who are falling me have made and saved lots of money.

Now as many people have questions that why market is falling heavily ?

Here is the answer there are 3 negative points in the budget for the stock market.

1 - Public holding limit to increase from 25% to 35%.

As said in budget that public share holding limit to be extend to 35% still decision in pending as decision is to be taken by SEBI only.

As promoter is owner of company and if promoter is holding more shares than only they will be interested in company to do well so if they decrease there holding than it will be negative for stock and as well as market due to more supply of shares will come to Market.

So many of good MNC company may prefer to do delisting than to sell their own stocks.

Note - still decision is pending and has to be taken my SEBI as SEBI as only authority to make rules about promoter holding.

2 - 20% percent tax on buyback

20% Tax on buyback it has also negative for stock market as in buyback company buy it's own shares at current or above market price so they are already paying more money to buy it's own shares as generally buyback is above stock price but there also 20% tax so many companies will not do buyback so it is also negative for stock market.

As as to buy it's own shares of company they have to pay 20% tax so it is not good for stocks and stock market.

3 - 20% percent tax on dividend

Dividend is the part of profit (money) that comapny credit (pays) share holders get when company is making profit.

As company has already paid tax on their profit and the rest net profit is only given in dividend so there also company have to again pay 20% tax so now many companies will give less dividend or ignore paying dividends so it is also a negative for stock market as many people invest in stocks only for dividend.

So these 3 are the main reason of fall in stock market.

Hope this article will be helpful to you all and all your doubt will be clear now.