India's NSE index fell about 1 percent on Monday to a seven-month low, erasing its gain for the year, as investors fretted that the government may impose long-term capital gains tax. Prime Minister Narendra Modi said on Saturday that people in financial markets must make a "fair contribution" to nation building, comments that were seen as setting up the prospect of higher taxes for investors.
However, Finance Minister Arun Jaitley clarified on Sunday that the government did not plan to impose long-term capital gains tax, though that was not enough to prevent selling on Monday. Indian shares were headed for an eighth session of declines in nine amid worries about outflows from emerging markets to the United States and continued concerns about India's move to ban higher-value currency notes. "The fact that we have broken certain levels since Brexit day low, could be spooking markets further."