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The Finance Bill will be discussed in Parliament on Monday as the investors are hoping to get some clarity on the General Anti-Avoidance Rule, which is expected to pull the market out of its three-month dip.
Parliament is likely to vote on the bill over the next two days.
After days of what traders said was intervention to defend the rupee, the Reserve Bank of India late on Friday took steps to encourage dollar inflows, a move dealers said may do little to improve near-term weakness in the currency, which is approaching an all-time low set in December.
Meanwhile, the gloomy mood derailed the year's biggest initial public offering from India, with auto parts maker Samvardhana Motherson Finance Ltd on Friday scrapping its USD 311 million issue because of poor demand.
Foreign funds are usually the biggest buyers of large Indian equity deals.
Adding to investor ire, India said on Friday it may review its tax break treaty with Mauritius, the East African island country that the majority of foreign portfolio inflows are believed to be routed through.
Mauritius is the same source of fund flows India is targeting through its GAAR proposal.
"Govt going all out to make foreign investors flee India. GAAR is not yet settled and they are making statements on Mauritius treaty review," tweeted Sandip Sabharwal, head of portfolio management services at Prabhudas Lilladher Group.
With additional information from Reuters
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