Mumbai, Feb 2 (IANS): The barometer Sensex of the BSE plunged almost 500 points on Friday as the re-introduction of long-term capital gains (LTCG) tax for investing in equities infused huge volatility in the market.

The Nifty50 too, slipped over 150 points to touch a low of 10,826.50 points.

In his Budget speech on Thursday, Finance Minister Arun Jaitley proposed to tax long-term capital gains on equities exceeding Rs 1 lakh at 10 per cent.

According to market observers, heavy selling pressure in consumer durables, banking, capital goods, auto and metals stocks added to the downward trajectory of the indices.

Around 11 a.m., the barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 35,707.60 points, traded at 35,401.63 points -- down 505.03 points or 1.41 per cent from its previous close.

The BSE market breadth was bearish as 2,311 stocks declined as against 213 advances.

On the the National Stock Exchange, the wider Nifty50 declined by 155.75 points or 1.41 per cent to trade at 10,861.15 points.

"Sensex and Nifty traded in negative after Jaitley proposed a long-term capital gains tax.

"Just Dial and PC Jewellers slumped 25 per cent and 57.39 per cent respectively, its steepest fall since one month," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

"IT stocks, however, traded higher," he added.

On Thursday, the benchmark indices had closed trade on a lower note.

The Nifty50 fell by 10.80 points or 0.10 per cent to 11,016.90 points, while the Sensex closed at 35,906.66 points -- down 58.36 points or 0.16 per cent.