Sensex plunges over 869 points on Budget deficit concerns | business | Hindustan Times
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Sensex plunges over 869 points on Budget deficit concerns

business Updated: Jul 06, 2009 17:44 IST

PTI
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The BSE benchmark Sensex on Monday suffered the biggest fall on any Budget day and in the year too by plunging over 869 points on the Bombay Stock Exchange on concerns at the high fiscal deficit set by the Union Budget.

The Sensex, which started coming down soon after the announcement of budgetary proposals, dipped below 14,000-point level before closing 869.65 points down at 14,043.40, surpassing the hefty fall of 749 points on January 7.

The key index had touched the day's low of 13,959.44 as all the heavyweight stocks led by Reliance Industries suffered a heavy loss 6.53 per cent.

Besides the fiscal deficit, trading sentiment also affected as European stocks dipped to a seven-week low on worries that economic recovery might still be far way off.

The 50-share National Stock Exchange index Nifty also tumbled by 258.55 points to 4,135.70, after hitting the day's low of 4,133.70.

Finance Minister Pranab Mukherjee said the fiscal deficit may rise to 6.8 per cent of gross domestic product in the year 2009-10, the highest since 1994.

Banking sector stocks suffered the most, losing 8.17 per cent to 7,768.63, as ICICI Bank tumbled by 10 per cent and HDFC Bank by 5.88 per cent among lenders as the Budget did not have measures to open up the industry and on concerns that the borrowing plan will reduce the value of bond holdings, brokers said.