Market benchmark Sensex dropped over 150 points in morning session on Monday as investor sentiment took a beating after the Union Budget failed to meet expectations.
After swinging over 300 points in early session, the 30-share BSE index was trading 125.45 points or 0.32 per cent lower at 39,610.08, and the broader NSE slipped 21.30 points, or 0.18 per cent, to 11,640.55.
In the previous session, Sensex logged its biggest single-day plunge in more than a decade on Saturday after the Union Budget failed to live up to market expectations of growth-boosting measures and fiscal discipline.
Sensex settled 987.96 points or 2.43 per cent lower at 39,735.53, and Nifty plunged 300.25 points or 2.51 per cent to close at 11,661.85.
Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 1,199.53 crore, while domestic institutional investors purchased shares worth Rs 36.64 crore on Saturday, data available with stock exchanges showed.
ITC, Hero Motocorp, M&M, Tata Steel, HDFC Bank and ONGC were among the top laggards, while Asian Paints, IndusInd Bank, Nestle India, HUL and Bharti Airtel were trading with gains.
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According to analysts, the market is disappointed as the budget lacked any significant measure to stimulate demand and did not provide any relief on capital gains tax as expected from budget.
Presenting the Union Budget for 2020-21 in Parliament, Finance Minister Nirmala Sitharaman pegged the fiscal deficit at 3.8 per cent for the current fiscal, compared to the earlier target of 3.3 per cent of GDP.
She also proposed lower income tax slabs for those foregoing various exemptions, and removed dividend distribution tax on companies, effectively shifting the tax burden to the recipients.
Further, volatility in the market also heightened after Chinese stocks opened after an extended break, traders said.
Bourses in Shanghai plummeted over 8 per cent, Japan and South Korea were trading with significant losses, while Hong Kong was up.
Brent crude oil futures fell 0.69 per cent to USD 56.23 per barrel.
The rupee opened on a weak note and declined by 34 paise to 71.66 against the US dollar in opening trade on Monday, after the Budget 2020 disappointed market participants.
Forex traders said rupee weakened amid concerns of fiscal slippage and rising coronavirus outbreak fears.
Finance Minister Nirmala Sitharaman in her Budget 2020 speech pegged the country’s fiscal deficit at 3.8 per cent for the current fiscal, compared to the earlier target of 3.3 per cent of GDP.
The rupee opened weak at 71.62 at the interbank forex market and then fell further to 71.66, down 34 paise over its last close.
The rupee had settled at 71.32 against the US dollar on Friday.
Market participants further said that factors like weak opening in domestic equities and foreign fund outflows weighed on the local unit, while easing crude oil prices supported the local unit to some extent.
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