Sensex Plunges by Nearly 1,000 Points as Budget 2020 Disappoints Dalal Street

A higher fiscal deficit gave no clear roadmap for how the Centre planned to reverse the economic slowdown.

New Delhi: Nirmala Sitharaman’s second budget has turned out to be a major disappointment for the markets, as a higher fiscal deficit gave no clear roadmap for how the Centre planned to reverse the economic slowdown.

Market participants also pointed out that expectations had built up that there would be a reduction in the long-term capital gains (LTCG) tax, which also did not happen.

The 30-share benchmark BSE Sensex nosedived as much as 1,274 points to the day’s low, before ending at 987.96 points or 2.43% lower at 39,735.53. This is one of the biggest falls in recent times after the presentation of the Union Budget.

Only 5 of the 30 constituents, including TCS, HUL, Nestle, and Infosys, settled the day in the green. On the downside, ITC, HDFC, L&T and SBI settled the day as top laggards. Heavyweights like HDFC twins, ITC, ICICI Bank, Reliance Industries, L&T, and SBI slumped up to 7 per cent, dragging the markets lower.

On the NSE, the Nifty50 closed at 11,643.80, down 392 points, or 3.26%. During the intra-day trade, the index hit a low of 11,633.30 level.

Sectorally, Nifty Realty index tanked over 8% at close as the Budget ruled out any sop to help the sector out of the inventory build-up. That apart, Nifty Bank, Private Bank, Metal, Financial Services, Auto, and Public Sector Bank indices settled over 3% lower

In the broader market, the S&P BSE mid and small-cap indices closed over 2% lower each at 15,119.65, and 14,344.70 level, respectively. 

“Post the announcement of the budget, benchmark Nifty tanked vertically to 11,650, a fall of over 300 points fall during the day. It happened mainly due to lot of expectations that D-street had built in the run-up to the event. We feel that the budget is balanced and has taken care of a number of sectors. It will certainly have a positive impact in the long run. Technically, the short-term trend is weak and is likely to continue for the next few trading sessions,” said Shrikant Chouhan, senior vice-president, equity technical research, Kotak Sec, in a statement.

(With inputs from agencies)