Sensex drops over 250 points; TCS down 2 per cent

Mumbai: Domestic equity benchmark BSE Sensex fell over 250 points in early trade on Tuesday dragged by losses in HDFC twins and TCS as Budget tax proposals continued to spook investors.

After dropping over 253 points in opening session, the 30-share index pared some losses to trade 152.50 points, or 0.39 per cent, lower at 38,568.07 at 0930 hours. Similarly, the broader Nifty shed 49.25 points, or 0.43 per cent, to 11,509.35.

TCS was among the top losers in the Sensex pack, falling up to 1.79 per cent, ahead of its quarterly results, scheduled to ba announced later in the day.

HDFC twins, Asian Paints, Kotak Bank, HUL, Bajaj Finance and Axis Bank too fell up to 2.19 per cent. On the other hand, Yes Bank, PowerGrid, Sun Pharma, NTPC, L&T, RIL and Vedanta were among the gainers, rising up to 2.90 per cent.

In the previous session, the 30-share gauge saw its biggest single-day loss this year so far, settling at 38,720.57 points, showing a sharp loss of 792.82 points or 2.01 per cent. The Nifty too tanked 252.55 points, or 2.14 per cent, to close at 11,558.60 points.

On a net basis, foreign institutional investors sold equities worth Rs 401.99 crore, while domestic institutional investors purchased shares to the tune of Rs 321.13 crore, provisional data available with stock exchanges showed Monday.

The Union Budget proposal to raise the public shareholding threshold to 35 per cent from the current 25 per cent and higher tax incidence for foreign portfolio investors and high networth individuals kept investors jittery, traders said.

"Fiscal prudence (in the Budget) was contrary to the market's expectation which was hoping for a stimulus in the slowing economy," said Vinod Nair, Head of Research, Geojit Financial Services. Focus has shifted to the upcoming quarter result where expectation remain muted, volatility is likely to prevail, he added.

Persistent weakness in global equities amid expectation of dovish US Federal Reserve policy too weighed on investor sentiment here, they added. Shanghai Composite Index, Hang Seng and Kospi were trading lower in their respective early sessions, while Nikkei was trading in the green.

On the currency front, the Indian rupee depreciated 17 paise to 68.83 against the US dollar. Meanwhile, the global oil benchmark Brent crude futures were trading 0.22 per cent lower at 63.97 per barrel.