Markets record highest percentage fall in a day since Jan '14

Benchmark share indices slumped on Tuesday, recording their largest drop in percentage terms since January 27, 2014, as investors turned cautious and booked profits ahead of the Budget session on Thursday.

The 30-share Sensex was down 518 points to end the day at 25,582 and the Nifty slumped 164 points to close at 7,623.

Blue-chips like L&T, RIL, ICICI Bank, ONGC and SBI, together contributed to 267 point rout on the Sensex.

On January 27, 2014 both the Sensex and Nifty ended 2% lower.

In absolute terms, today, the benchmark indices recorded their highest fall since September 03, 2013.

Earlier in the day, the benchmark indices hit record highs for the fourth straight session, hitting the 7,800 mark on the Nifty for the first time. However, the sell-off was triggered post the Rail Budget announcement.

Meanwhile, the first rail budget of the current NDA government tried to strike a balance between the twin conflicting objectives of making profits like a commercial enterprise and yet serving its ‘social obligations.

The Railway budget had key initiatives for the passenger amenities, boosting freight performance and improving the efficiency of Indian Railways.

Sadananda Gowda’s budget pins its hopes on increased participation from private players in station modernization, for safety measures like building boundary walls and expects foreign direct investment to aid in building Railway infrastructure.

Sectors & Stocks

Railway-related stocks fell on profit-taking. Earlier during the week, shares in the sector have surged on hopes of reforms including opening of the sector to foreign investments under newly-elected Modi government, traders say.

Texmaco Rail crashed as much as 20%; while Kalindee Rail, Stone India, Kernex Microsystems, BEML and Titagarh Wagons plunged 5% each.

All the sectoral indices were in red with losses of atleast 0.5%.

Realty, Power, Capital Goods, Metal and Consumer Durables indices slumped 4-7%, were the major sectral draggers.

Banking, Oil & Gas, Auto, IT and Health Care indices gave off 1-3%.

28 of the 30 Sensex stcoks were in red. The only exceptions were Sun Pharma and HDFC up 0.8% and 0.2% respectively.

BHEL, NTPC, Tata Power, Coal India, L&T and Tata Steel down 4-8% were the major losers.

From the oil & gas space, ONGC, RIL and Gail India were down 1.5-4%.

The market breadth was very negative on BSE. 2,230 stocks declined while 769 stocks advanced.

Rupee

The rupee is trading at 59.85 compared with its Monday close of 60.0125/0225, tracking gains in other Asian currencies versus the dollar and on expectations of continued foreign fund inflows into local shares.

Global Markets

Europe's main stock indices and bond benchmarks dipped on Tuesday amid reports of new U.S. fines on banks and dimming prospects for an asset purchase programme from the European Central Bank.

The pan-European FTSEurofirst 300 index was down 0.1% at 1,380.33. Germany's Dax was down 0.3%, France's CAC was down 0.1% and the UK's FTSE 100 was down 0.1%.

It was a quiet session in Asia, with the region's stocks tracking sideways as the earnings season kicked off with disappointing guidance from regional tech heavyweight Samsung.

MSCI's broadest index of Asia-Pacific shares outside Japan was a fraction firmer, touching a three-year high during the session. Nikkei and Strait Times were the only markets in red, down 0.4% and 0.1% respectively.

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