Equity markets lingered in negative territory in early noon trades, but off its early lows when the Sensex tanked 660 points to touch a low of 22,494.61 during the course of finance minister Arun Jaitley's budget speech. Weakness in the markets were led by FMCG, automobile and IT stocks even as weak Asian market cues also contributed to the broad-market fall.
At 1.10 pm, the 30-share BSE S&P Sensex was at 23,168.15, down 13.85 points, or 0.1 percent from previous close. On the other hand, the broader 50-stock Nifty erased all its losses and was up 4.45 points at 7,034.20.
Among the major laggards, tobacco major ITC stock was the biggest Sensex laggard, dropping 3.5 percent to Rs 280.75 after finance minister proposed 10-15 percent hike in excise duty on cigarretes.
Similarly, auto major Maruti dropped 3 percent to Rs 3,305, Wipro fell 2 percent to Rs 521 and Hindustan unilever eased 1.9 percent to Rs 834.15.
"This governmentt is anti-gold, anti-cigarettes. Why don’t people grasp it. It is clear policy of the government," said Sameer Arora, founder and fund manager of Helios Capital Management.
Uday Kotak, Vice-Chairman and MD of Kotak Mahindra Bank, said 3.5 percent fiscal deficit and has the courage to control it is a very significant things in Indian bond market. It is a huge relief for the bond market."
Deepak Parekh, chairman, HDFC, said, "I think the FM has done the right thing and financial prudence is the name of the game. 3.5 percent limit and has stuck to it despite global and domestic headwinds. I am not sure why the market is so disappointed. People who earn more must pay more taxes. If you earn more than Rs 10 lakh, you have to pay 10 percent tax."
On the other hand, Tata Steel jumped 4.7 percent to Rs 260, ICICI Bank rose 3.7 percent to Rs 191.75, SBI moved up 3.6 percent to Rs 161.90, Reliance Industries gained 2.1 percent to Rs 970.20 and Dr Reddy's was up 1.9 percent at Rs 3,050.45.