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Budget woes, global sell-off pull Sensex down 310 points

Budget woes, global sell-off pull Sensex down 310 points

Mumbai, Feb 5 (PTI) A sell-off in global markets further hit sentiments on domestic bourses which are already reeling under budget woes, pulling the Sensex down by nearly 310 points to a three-week low and the Nifty by 94 points on heavy selling, mainly in banking, capital goods, and IT counters.

This was the fifth straight session of loss for domestic stock markets that saw a massive erosion in valuation after the government unveiled in its budget a proposal to levy 10 per cent long-term capital gains (LTCG) tax on equities and revised upwards its deficit target for the current fiscal at 3.5 per cent.

Since February 1, the day Union Budget 2018-19 was presented, the 30-share Sensex has plummeted by over 1,208 points in three sessions and the NSE Nifty has lost 361 points during the three-day period.

Investors also turned cautious ahead of the RBI policy meet this week as they feel that repo rate might be increased amid inflation concerns.

Asian markets too ended lower and European shares were in the negative zone in their early session following deep losses on Wall Street last week after a strong US jobs report and rising Treasury yields fanned fears of interest rate hike quicker than thought.

The barometer had lost 1,216.50 points in the previous four sessions, following nervous offloading of positions by participants, triggered by imposition of long-term capital gains of 10 per cent on equities in the Budget 2018.

The seasonally adjusted Nikkei Services Business Activity Index improved to 51.7 in January, up from 50.9 in December, signalling a faster expansion. The heavy losers among Sensex components were HDFC Ltd, L&T, Kotak Bank, IndusInd Bank, Bajaj Auto, Adani Ports, ONGC, Yes Bank, HDFC Bank, ICICI Bank, TCS, Wipro, Hindustan Unilever, M&M, Asian Paint, Tata Steel and Infosys, down by up to 4.06 per cent.