Rail Budget fails to cheer market; Sensex plunges 316 pts to 3-month low

The BSE benchmark Sensex on Tuesday plummeted by 316.55 points to close at three-month low of 19,015.14 as the rail budget dampened the market sentiment amid particularly weak global cues.

Updated: Feb 26, 2013, 17:33 PM IST

Mumbai: The BSE benchmark index Sensex on Tuesday widened early losses to end 316.55 points down at 3-month low of 19,015.14, wiping out over Rs 1 lakh crore wealth as Rail Budget failed to inspire investors, already rattled by fears of worsening EU debt crisis following poll stalemate in Italy.

The Bombay Stock Exchange 30-share S&P BSE Sensex resumed lower on the back of weak Asian cues following steep 216-point fall on Wall Street yesterday on concerns over Italian elections and looming spending cuts in the US.

Sensex continued to reel under selling pressure breaching the 19K level to a low of 18,976.94 before settling at 19,015.14 -- a loss of 316.55 points or 1.64 percent. This was its lowest close since 18,842.08 on November 27, 2012.

Similarly, the 50-issue CNX Nifty of the NSE also plunged by 93.40 points or 1.60 percent to end below 5,800-mark at a three-month low of 5,761.35.

Presenting the Railway Budget in the Lok Sabha today, Railway Minister Pawan Kumar Bansal hiked freight tariff of less than five percent, effective from April 1 this year.

"There was nothing exciting in the budget and the freight rate hike could push up prices," said Pankaj Pandey, Head Research, ICICIdirect.

25 out of 30 Sensex-based scrips fell. Losses were led by RIL, HDFC, Tata Motors, ONGC, M&M, Bajaj Auto and CIL all of whom shed 3-4 percent each. Mid-cap and small-cap counters bled for the second straight day today with their BSE indices losing 1.76 and 2.43 percent respectively.

Railway-linked stocks like Kalindee Rail Nirman and Titagarh Wagons fell between 8-12 percent.

The total market capitalisation tanked by Rs 1.07 lakh crore today to end at Rs 661.4 lakh crore, BSE data showed.

Global markets turned out a poor performance with Asian markets ending 1-2 percent down. European indices were trading with deep losses of 1.5 percent each in afternoon.

"Global cues were poor today. This dragged down Indian markets," said Saurabh Mukherjea, Head of Equities, Ambit Capital. Reports said an inconclusive result to parliamentary elections in Italy sparked off fresh fears over EU debt crisis.

Asian stocks closed weak between 0.47-2.26 percent on fears of political gridlock in Italy while European markets like CAC was down by 2.28 percent, the DAX by 1.84 percent and the FTSE by 1.23 percent in afternoon trades.

Back home, major losers from Sensex pack were Hindalco (4.49 percent), Bajaj Auto (4.20 percent), HDFC (3.74 percent), HDFC Bank (3.74 percent), RIL (3.51 percent), M&M (3.35 percent), Tata Motors (3.29 percent), Coal India (3.28 percent), Tata Steel (3.08 percent), ICICI Bank (2.77 percent), BHEL (2.63 percent) and Sun Pharma (2.61 percent).

Maruti Suzuki (2.52 percent), L&T (2.44 percent), Cipla (2.39 percent), Dr Reddy's Lab (2.12 percent), Sterlite Ind (1.76 percent) and HDFC Bank (1.14 percent) also posted losses.

However, TCS rose by 1.56 percent, followed by Infosys (1.47 percent) and Bharti Airtel (1.38 percent).

Among sectoral indices, the BSE-Oil&Gas fell by 3.07 percent, followed by BSE-Auto (2.76 percent), BSE-CG (2.44 percent), BSE-Metal (2.30 percent), BSE-PSU (2.29 percent), BSE-HC (1.93 percent), BSE-Realty (1.89 percent), BSE-Bankex (1.68 percent) and BSE-Power (1.29 percent).

The market breadth remained negative trend as 2,072 scrips ended with losses while 774 finished with losses and 115 closed unchanged. The total turnover improved further to Rs 1,959.90 crore from Rs 1,931.32 crore on Monday.

Meanwhile, Foreign institutional investors (FIIs) bought shares worth a net Rs 266 crore on Monday as per SEBI's data.