Market benchmark Sensex plunged over 450 points in afternoon session on Saturday after the Union Budget projected widening of fiscal deficit for the current financial year.
The 30-share BSE index was trading 452.14 points, or 1.11 percent, lower, at 40,271.35 at 1320 hours.
Similarly, the 50-share NSE Nifty cracked 111.70 or 0.93 percent, to 11,850.40.
Sensex was trading over 150 points higher ahead of the Budget presentation.
Presenting the Union Budget for 2020-21, Finance Minister Nirmala Sitharaman pegged the fiscal deficit at 3.8 percent in the current fiscal, compared to the earlier target of 3.3 percent of GDP.
"We estimate a fiscal deficit of 3.8 percent in RE (revised estimate) 2019-20 and 3.5 percent for BE (Budget estimate) 2020-21. This estimation is consistent with Government's abiding commitment to macroeconomic stability," Finance Minister Nirmala Sitharaman said while presenting Budget 2020-21.
In her second Budget presentation, she said certain government securities will be open for foreign investors.
She added that the government plans to increase investment limit for FPIs in corporate bonds from nine percent to 15 percent.
On a net basis, foreign institutional investors sold equities worth Rs 4,179.12 crore, while domestic institutional investors purchased shares worth Rs 3,816.44 crore on Friday, data available with stock exchanges showed.
Tech Mahindra, PowerGrid, Tata Steel, NTPC, Kotak Bank, and HCL Tech were among the top laggards, shedding up to three percent.
On the other hand, HUL, UltraTech Cement, Maruti, and Asian Paints were trading with gains.
According to analysts, investors are cautious ahead of the Union Budget as all eyes will be on how the Centre is going to bring growth as any increase in spending would result in widening of fiscal deficit.
Negative cues from global markets amid concerns over China's corona virus outbreak continued to weigh on investor sentiment here, traders said.
Benchmarks on Wall Street ended with sharp losses on Friday.
The forex market remained closed for the weekend.
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