Investors were wary on the eve of the Union Budget and sold their long positions as the indices closed lower, which witnessed a sharp fall on Tuesday.
The S&P BSE Sensex slipped by 137.30 points to close at 25444.81.
A broader BSE-100 index fell by 0.63 per cent, BSE-200 by 0.72 per cent and BSE-500 by 0.79 per cent.
However, mid-cap and small-cap stocks witnessed sharp falls, by 1.44 per cent and 1.82 per cent, respectively. On the National Stock Exchange (NSE), the 50-share Nifty closed at 7585 with the loss of 38.20 points.
“The freefall may have got arrested but the Indian equity market ended with losses for the second consecutive trading session ahead of Union Budget which is scheduled on Thursday. Traders and investors remained cautious and preferred to book profit or stay on the sidelines ahead of the mega event,” said Amar Ambani, Head of Research, IIFL. Markets are expecting a fiscally prudent budget with the government resorting to some tough measures to reduce inflation and to raise resources.
“We don’t expect the new government to deviate from the path of fiscal prudence, and instead create a more conducive environment for private sector investment,” said a report published by Religare Institutional Research.
The government’s Economic Survey acknowledges the issues and bottlenecks plaguing the economy, and sets the priorities straight to provide a much-needed economic impetus over the medium-to-long term.
Key focus areas identified to boost long-term growth prospects are: to move beyond the near-term subsidy rationalisation to revenue-focused fiscal optimisation; a low and stable inflation regime, and a proper legal and regulatory framework.
Rupee edges upExpecting strong economic measures from the Union Budget for 2014-15, the rupee closed stronger at 59.75 a dollar against 59.78 on Tuesday. The rupee hit a high of 59.67 intra-day.
