Fiscal worries drag Sensex 453 pts, bank index 463 pts

Equity benchmarks fell sharply on Thursday, with the Sensex shedding nearly 500 points intraday as investors looked cautious after widening fiscal deficit and ahead of second quarter GDP data due later today. Weakness in Asian stocks also weighed on sentiment.

All sectoral indices barring Realty ended in red, falling 1-2 percent while Realty gained over a percent. Banks extended sell-off on fiscal worries and that resulted further fall in equity benchmarks.

The 30-share BSE Sensex was down 453.41 points or 1.35 percent at 33,149.35.

The 50-share NSE Nifty fell 134.80 points or 1.30 percent to 10,226.50 on the day of expiry of November futures & options contracts.

“Investors remain in a cautious note and today’s Q2 GDP data will be a key trigger to give direction to the market,” Vinod Nair, Head of Research, Geojit Financial Services said.

Any recovery in the GDP numbers revamped by the better consumer spending in the September quarter may rekindle positivity, but investors would also prefer clarity from Gujarat elections before strengthening their bets, Anand James, Chief Market Strategist at Geojit Financial Services told Money Control.

Jayant Manglik President Retail Sales at Religare Securities advised corrections should be used as a buying opportunity. Traders should avoid over leveraging until keys events like the RBI policy and US Fed meet in the next couple of weeks, he was further quoted.

The fall in broader markets was less than equity benchmarks as the Nifty Midcap lost 0.7 percent. Even the market breadth was not very bad as about four shares declined for every three shares rising on the NSE.

The fiscal deficit for April-October period widened to Rs 5.25 lakh crore (reaching 96 percent of FY18 target), against Rs 4.2 lakh crore in year-ago.

Meanwhile, the Indian rupee also depreciated as widened fiscal deficit and expectation of extension in oil production cut from OPEC influenced investors to offload funds from the market. It closed up 14 paise at 64.46 against the US dollar.

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