Mumbai: After a promising start, equities gave up early gains and even finished with moderate losses pushing the SENSEX in negative terrain at close on the Bombay Stock Exchange (BSE) on August 1 on late sell-off by punters and retail investors.

Initially, reports of some tax incentives for small investors, including a hike in the threshold for tax deduction at source on dividends from Rs 1,000 to Rs 2,500, received positive response from speculators and retail investors.

However, reports about the government's intention to introduce the T+1 regime for rolling settlement in place of the existing rolling settlement of three days after the transfer of shares disappointed punters and public investors.

The BSE Benchmark 30-share Index, which opened firm at 2998.46 and moved past 3000- mark to the intra-day high at 3018.52, later fell back substantially to end at 2975.81 as against the July 31 close of 2987.65, netting a fall of 11.84 points or 0.40 per cent.

The broad-based BSE-100 Index eased by 3.78 points to 1502.45 from previous close of 1506.23.

Attributing early stocks upsurge to fairly good purchases by domestic mutual funds, brokers said investors' response to tax sops by the government was cautious in view of continued drought fears.

However, Dr Reddy's Lab was in the limelight having scored sharp gains on hectic buying prompted by the company's announcement of a 50 per cent growth in net profits at 80.1 crore on a 26 per cent increase in revenues at Rs 357.4 crore in the first quarter ended June 2002.

PTI