Mumbai: The benchmark indices plunged up to 1.72% in late morning trade after Fitch Ratings said weak public finances constrain India’s sovereign ratings.
The Sensex tumbled by 591.69 points or 1.64% to quote at 35,314.97 as banking, financials capital goods and auto stocks nosedived.
Also, the NSE Nifty dipped below the 10,900-mark to trade at 10,826.50, down by 190.40 points, or 1.72%.
Widespread selling dragged all the sectoral indices led by realty, consumer durables, power, capital goods and banking sectors, falling up to 5.17%.
Finance Minister Arun Jaitley projected a fiscal deficit of 3.5% of GDP for current fiscal against the earlier target of 3.2% which also dampened the market sentiment.
The sentiment took another jolt after Fitch Ratings today said high debt burden of the government constrains India’s rating upgrade.
Banking stocks led by Yes Bank, SBI, ICICI Bank, Kotak Bank, HDFC LTD and IndusInd Bank suffered losses up to 3.80%.
Other losers that pulled down the key indices from their crucial levels were ONGC, Tata Steel, Maruti Suzuki, M&M, Hero Motocop, Power Grid, Coal India, Asian Paints, Reliance Ind, Coal India.
In the broader market, the BSE Midcap index fell by 2.79% while the Small index took a bigger hit of 3.67% on heavy losses in PC Jewellers.
PC Jewellers tanked 50% in early trade before trading at Rs 397.10, down by 17% at 11.35 AM.
Global markets were also trading in the negative after most of the US stock indices fell due to political crisis and growth concerns.