Indian stock markets fell as investors found the Union Budget proposals on Friday as tax mopping and inflationary, with the benchmark Sensex of Bombay Stock Exchange (BSE) falling 210 points to 17,466.20, despite firmness in global equities. Refinery, power, capital goods, banking, PSUs and metals stock faced intense selling pressure. Indian Finance Minister Pranab Mukherjee in the Budget 2012-13 increased service tax and excise duty to 12 per cent from 10 per cent, which will make cars, fridges, 2-wheelers, ACs and washing machines costly. Besides, a higher fiscal deficit of 5.9 per cent for the current fiscal overshadowed several positives, including lower income tax and strong indications of more economic reforms. The Bombay Stock Exchange 30-scrip Sensex was highly volatile and moved between 17,871.00 and 17,426.58. It closed 209.65 points or 1.19 per cent down at 17,466.20. The 50-scrip NSE index Nifty plunged 62.60 points or 1.16 per cent to 5,317.90. “After moving up at the start of the budget, the market saw selling pressure on the announcement of increase in service tax and excise duty. Both these levies would make goods and services costlier and keep up the inflationary pressures,” said Milan Bavishi-Head Research-Inventure Growth and Securities. The hike in the cess created a negative impact on the oil explorers with ONGC, Cairn and RIL falling in the range of 3-6 per cent, he said. Akshay Gupta, MD & CEO of Peerless Mutual Fund said: “The budget trajectory is headed in the right direction. Despite baby steps, the fiscal consolidation exercise is positive for country’s finances.” Widening fiscal deficit was also the main problem and tackling it is very difficult in the current situation as global oil prices are at high level, a broker said. The FM has given a rosy picture for the next couple of years and said that economy is showing a sign of turn around while current year’s slow down was attributed to weak industrial growth and also european debt crisis. FIIs continued to be net buyers but domestic institutinal investors (DII) remained net sellers to the tune of of nearly four billion this year so far. Kishor P Ostwal, CMD, CNI Research Ltd said,”market is not impressed with Budget as borrowings are very high whereas fiscal deficit is not maintainable at 5.1%. STT reduction is not impressive as delivery volumes are not there in the market. There is clear cut impression of weak Govt finances which could see flight of capital to overseas markets like the U S which are doing extremely well.” According to a broker, if the monsoon gets delay this year that might force the central bank to keep the interest rates unchanged at higher levels, which will affect the company’s borrowings as well as their bottom-lines. Heavy selling was seen in RIL, L&T, ONGC, SBI, Sun Pharma, ICICI Bank, Jindal Steel, BHEL and NTPC. However, contrary to the market behaviour, ITC was the top gainer from the sensex pack with a rise of 3.65 per cent as excise dity on cigarates raised and that was said to be positive for the cigarate companies.