Benchmark equity indexes S&P BSE Sensex and NSE Nifty 50 continued to decline for a second consecutive session on Monday. Sensex lost over 900 points in late afternoon trade, while the broader Nifty tanked by over 245 points.
The markets were reportedly on track to log the biggest single-day loss in nine months, as they continued to react to 2019 Budget fineprint.
Union Budget proposals and heavy sell-off in global equities
Reports said Sensex and Nifty are likely to register the worst day of 2019. This comes after the government, in its latest Budget, proposed to raise the minimum public shareholding threshold for all listed companies.
The Union Budget also proposed a higher tax incidence for foreign portfolio investors as well as high net-worth individuals. Meanwhile, heavy global sell-off also hurt the domestic markets.
Sensex ended at 38,720, while Nifty closed at 11,558
The 30-share Sensex on Monday lost over 907 points during the day, it ended at 38,720.57 points - 792.82 points or 2.01% lower than Friday's closing mark. Meanwhile, the larger Nifty settled below the 11,600-mark, at 11,558.6 points after losing 252.55 points.
Auto and banking shares among the worst performers
Auto and banking shares were reportedly trading in red during the Monday session. Top losers in Sensex included HDFC Bank, L&T, Bajaj Finance, ONGC, NTPC, Hero MotoCorp, and Maruti.
ICICI Bank, SBI, Kotak Mahindra Bank, and Axis Bank, Punjab National Bank, Indian Oil Corporation, and Bank of India were also among the worst performers in today's session.
Proposal to increase minimum public shareholding impacting markets negatively
"Higher tax incidence proposed in the Budget for foreign portfolio investors and high net worth individuals is spooking the markets," AK Prabhakar, Head of Research at IDBI Capital, was quoted as saying by NDTV.
"The proposal to increase minimum public shareholding for all listed companies in Budget is also impacting the markets negatively," he added.
'Markets are voicing their disappointment'
"The markets are voicing their disappointment in the lack of anything in the Budget for the consumer. A fair amount of the investor community is disappointed with the Budget...there will likely be short-term money exiting the market," said Sunil Sharma, CIO of Sanctum Wealth Management.