Sensex logs heaviest fall as budget fails to deliver

Disappointment over the Budget proposals and muted global markets led the Sensex to log the heaviest fall in seven months on Monday. Both the key equity indices − Sensex and Nifty − fell over 2 per cent.

Global markets traded lower after US reported strong job data, which faded hopes of an aggressive rate cut by the Federal Reserve.

The 30-scrip Sensex closed 792.82 points or 2.01 per cent lower at 38,720.57 and the broader Nifty50 declined by 252.55 points or 2.14 per cent to 11,558.60.

Investor sentiment also took a beating as the second-largest state bank, Punjab National Bank’s (PNB) on Saturday admitted that it had been defrauded of Rs 3,805.15 crore by Bhushan Power and Steel Ltd (BPSL).

This is the second time in 12 months that the state-run bank has been duped. Last year, jeweller Nirav Modi and his uncle Mehul Choksi had defrauded it of Rs 14,000 crore in one of the biggest bank scams in the country.

PNB declined by 11.25 per cent to Rs 76.30 apiece dragging the PSU Bank index, which closed 5.90 per cent lower.

Heavy selling was seen in PSU banks such as Bank of India, Union Bank of India and Canara Bank, which were trading over 8 to 10 per cent lower.

Auto companies were also major contributors to the fall. Hero MotoCorp Limited and Maruti Suzuki India declined over 4 per cent, the most among the 15 constituent companies on the NSE Auto index.

Indo-Asian News Service