Fiscal deficit concerns spook markets; Sensex drops most in two months

Foreign portfolio investors pull out Rs 1,500 crore

The benchmark Sensex on Thursday fell the most in over two months, while the yield on the 10-year government security neared a one-year high after the fiscal deficit at the end of October climbed to 96 per cent of the budgeted target for the current financial year. The extension of production cuts by oil-producing countries triggered fears of further widening in the fiscal deficit.

Domestic markets were already trading weak amid a huge sell-off in technology stocks across the US and Asia, but the selling intensified after the fiscal deficit data was released. Investors also remained cautious ahead of the