Shares of ITC plunged over 7% today after government’s appointed panel recommended a steep 40% tax on tobacco products triggering a sell off in cigarette makers. In the candlestick chart, ITC has formed big red color candle with huge volume of 33.9 Million shares. In the near term, the stock has support in the range of 300-310, breaking which will take the stock further.
It is not yet clear whether the proposed 40% tax will be in addition to the existing taxes or would be a part of the existing tax of around 65%. Though a fine print or details on the proposal are still awaited, the market reacted negatively given the way ITC’s cigarette volume dropped after a 10%-15% hike in excise duties across cigarette categories after the Union Budget in February. Its stock has fallen by 21% since then.