Bears tighten grip on D-Street, Sensex plunges 793 points after Budget announcements

Bearish trends ruled equity market on Monday with Sensex plunging nearly 800 points amid heavy selling pressure after the Union Budget for 2019-20 announced measures to tax share buybacks and increase minimum public shareholding in listed companies.

According to reports, the panic selling in the past two trading sessions wiped out Rs 5 lakh crore of investors' wealth. Auto and PSU bank stocks were the worst sufferers.

When the closing bell rang, the BSE S & P Sensex was down 793 points or over 2 per cent at 38,721 while the Nifty 50 dropped 253 points to 11,559.

All sectoral indices at the National Stock Exchange (NSE) were in the red with Nifty PSU bank plunging 5.9 per cent. Nifty realty skidded 3.5 per cent, auto by 3.2 per cent and financial services by 2.9 per cent.

Panic selling weighed in after the Punjab National Bank (PNB) reported a fraud of Rs 3,800 crore by Bhushan Power and Steel, saying the company misappropriated bank funds and manipulated books of accounts to raise funds from the consortium lender banks.

PNB closed 11 per cent lower at Rs 72.80 per share while the State Bank of India was down over 4.1 per cent at Rs 355.25 apiece.

Finance Minister Nirmala Sitharaman presented the Union Budget last week on Friday, her first after the National Democratic Alliance led by Prime Minister Narendra Modi swung to power after a landslide victory in the general elections.

The Budget increased minimum public shareholding in listed companies to 35 per cent from 25 per cent which could lead to a wave of new issuance. Investors also turned cautious ahead of the June quarter earnings season.

Bajaj Finserv shed 10 per cent while Bajaj Finance was down 7.7 per cent, ONGC by 5.6 per cent, ONGC by 5.6 per cent and NTPC 5.3 per cent.

Heavy selling pressure was seen in auto stocks due to the absence of any conspicuous impetus in the Budget for the beleaguered sector. Hero Motorcorp was down 5.2 per cent, and Maruti Suzuki by 5.1 per cent.

However, Yes Bank was up 5.6 per cent after it announced the appointment of two senior management leaders and said the bank's financial position is sound and stable.

Other which showed gains were Bharti Infratel, JSW Steel and IT stocks like HCL Tech, Tata Consultancy Services, and Tech Mahindra.

Meanwhile, Asian shares were broadly weaker after tracking Wall Street which fell from record highs last week.

Investors turned their attention to the upcoming testimony from US Federal Reserve Chairman after a strong jobs report cast doubt on the pace of interest rate cuts.

Share sentiment was also dampened by US investment bank Morgan Stanley's decision to reduce its exposure to global equities due to misgivings about the ability of policy easing to offset weaker economic data.