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Market slides as budget disappoints
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The Sensex plunged 5.8 percent on Monday as the higher-than-expected fiscal deficit announced by the government in the Union budget disappointed investors.
The 30-share sensitive index swung from an intra-day high of 15,097 to an intra-day low of 13,959 and closed 870 points lower at 14,043. The fifty-share Nifty ended 5.84 percent down at 4,165.
The fall in the benchmark was led by Reliance industries, ICICI Bank, L&T and HDFC.
On the sectoral front, the BSE Banking Index dropped 8.1 percent, followed by the Realty Index which ended 7.2 percent lower. However, the BSE FMCG Index closed 0.97 percent higher.
Reliance Infra was the benchmark’s biggest loser with the stock plunging over 12 per cent. The other big losers were ICICI Bank, JP Associates and Tata Steel, all down over 9 per cent.
The budget fell short of investor expectation as it did not include any significant policy changes. The populist budget instead focused heavily on increased borrowing and spending to aid farmers and the poor, pushing the fiscal deficit for the year ending March 2010 to a higher-than-expected 6.8 percent of GDP.
Do you think the government could have introduced more market-friendly reforms to boost investor sentiments?
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The disappointment about budget 2009 is due to lack of reforms.The market was expecting a shift in vision from the government by way of announcements that could speed up foreign investment.
The government has placed more reliance on development through borrowings and increase burden of fiscal deficit.
This is a politician!s budget, not an economist. This upa govt is full of politicians. Nobody bothers about Indian economy or the poor. If the present Government is fully patriotic, let them bring a one line resolution to bring the illegal money deposited in foreign banks to India. Then Indian govt will be one of the richest in the world. then it will be a truly socialistic country, as visualised by the First Prime Minister of India, Pandit Jawaharlal Nehru. Will the present Congress leaders who claim to inherit Smt Indira Gandhi!s AAM ADMI, will fulfill the dreams of her Father and the First P.M.of India.