Stock markets fell as investors found the Union Budget proposals as tax mopping and inflationary, with the BSE benchmark Sensex falling 210 points to 17,466.20, despite firmness in global equities.
Refinery, power, capital goods, banking, PSUs and metals stock faced intense selling pressure.
FULL COVERAGE: UNION BUDGET 2012
Finance Minister Pranab Mukherjee in the Budget 2012-13 increased service tax and excise duty to 12 per cent from 10 per cent, which will make cars, fridges, 2-wheelers, ACs and washing machines costly.
Besides, a higher fiscal deficit of 5.9 per cent for the current fiscal overshadowed several positives, including lower income tax and strong indications of more economic reforms.
The Bombay Stock Exchange 30-scrip Sensex was highly volatile and moved between 17,871.00 and 17,426.58. It closed 209.65 points or 1.19 per cent down at 17,466.20.
The 50-scrip NSE index Nifty plunged 62.60 points or 1.16 per cent to 5,317.90.
"After moving up at the start of the Budget, the market saw selling pressure on the announcement of increase in service tax and excise duty. Both these levies would make goods and services costlier and keep up the inflationary pressures," said Milan Bavishi-Head Research-Inventure Growth and Securities.
The hike in the cess created a negative impact on the oil explorers with ONGC, Cairn and RIL falling in the range of 3-6 per cent, he said.
Akshay Gupta, MD & CEO of Peerless Mutual Fund said: "The budget trajectory is headed in the right direction. Despite baby steps, the fiscal consolidation exercise is positive for country's finances."