Fiscal deficit worries give Sensex, Nifty a scare

Stock market finished lower in a fluctuating session today amid expiry of December derivatives contracts and on fears that the government going in for additional borrowing could upset the fiscal deficit applecart.

The government has decided to make an additional borrowing of Rs 50,000 crore this fiscal through dated securities, a move that may risk the target of fiscal deficit breaching 3.2 per cent of GDP.

But the finance ministry maintained that there will be no change in net borrowing as envisaged in the Budget for 2017- 18, which soothed the frayed nerves a bit.

The 30-share Sensex, after touching the day's high of 34,023.65, succumbed to profit-booking and settled lower by 63.78 points, or 0.19 per cent, at 33,848.03. The gauge had lost 99 points in the previous session.

The 50-share NSE Nifty also ended down 12.85 points, or 0.12 per cent, at 10,477.90. Intra-day, it shuttled between 10,534.55 and 10,460.45.

"Market remained range-bound on the expiry day due to lingering concerns on fiscal slippage on account of the government's additional borrowing plan and shortfall in indirect tax collection. Investors used every rally as an opportunity to sell. Rich valuation and lack of fresh triggers may lead the market to a consolidation phase," said Vinod Nair, Head of Research, Geojit Financial Services.

The end of December series contracts in the derivatives segment and a mixed trend in global markets after an oil rally made investors wait and watch.

Till today's expiry in December, the Sensex was up by 698.68 points, or 2.10 per cent, and the Nifty 251.35 points, or 2.45 per cent.

From the Sensex bloc, SBI lost the most by plunging 1.86 per cent, followed by Hero MotoCorp and Sun Pharma.

Domestic institutional investors (DIIs) sold equities worth a net Rs 206.68 crore while foreign portfolio investors (FPIs) bought shares worth a net Rs 172.32 crore yesterday, as per provisional data.

The overall losses rose because of weakness in heavyweight Adani Ports, PowerGrid and NTPC, which slumped by up to 1.35 per cent.

Axis Bank dived 1.29 per cent after market regulator Sebi ordered the lender to conduct a probe into the alleged price- sensitive data leak.

Metal stocks ran up on the back of firm demand in China. Tata Steel was at the front, with a climb of 1.78 per cent.

Dr Reddy's climbed 1.30 per cent today on receiving approval from the US health regulator for a drug that reduces blood phenylalanine.

Reliance Communications today added to its previous gains, soaring 7.72 per cent, as investor sentiment remained upbeat following the announcement of its debt resolution plan. It had jumped 65.52 per cent in the previous two sessions.

Broader markets broke with the trend, with small-cap and mid-cap indices rising up to 0.32 per cent.

Sector-wise, selling was maximum in the BSE PSU index, down 0.77 per cent, followed by oil and gas, auto, bank, healthcare and FMCG.

Realty, metal and IT managed to close in the green.