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Sensex down 260pts, Nifty below 8700 on Rail Budget, expiry

16:56

The News International Team

The market fell nearly a percent on Thursday with the Nifty ending the F&O expiry session below 8700-mark. Railway Budget was a dampener as Railway Minister Suresh Prabhu raised freight rates on several commodities.

The 30-share BSE Sensex fell 261.34 points to 28746.65 while the 50-share NSE Nifty slipped 83.40 points to 8683.85 dragged by banks, auto, FMCG and capital goods stocks.

The broader markets too were under pressure as the BSE Midcap and Smallcap indices declined 0.8 percent each. Declining shares outnumbered advancing ones by a ratio of 1758 to 1076 on the BSE.

Union minister Suresh Prabhu presented his maiden Railway Budget today. He announced some populist measures with no direct burden on Aam Aadmi but pinched pockets of corporates by raising freight rate hike.

He announced an investment of Rs 8.5 lakh crore over the next five years. He says operating ratio for FY16 will improve to 88.5 percent against targetted operating ratio of 91.8 percent in FY15.

Railway stocks like Kalindee Rail Nirman and Texmaco Rail declined 2.5-4 percent while Zicom Security Systems gained 5.3 percent on security measures and A2Z Infra Engineering rallied 10 percent on focus on cleanliness.

Cement, coal and metal stocks reeled under pressure after freight rates were hiked by 6.3 percent for coal, 2.7 percent for cement and 3.1 percent for pig iron. Freight rate for grains & pulses, and urea was hiked by 10 percent each.

Deven Choksey of KR Choksey is not overly worried about freight hikes in cement and doesn’t see a very material impact of that on cement companies as such.

According to him, the profound measures announced in the Railway Budget with regards to safety, technology development, revenue creation, investments was unlike any other previous Budget.

For the February series, the Sensex and Nifty fell 3 percent as Bank Nifty tanked 10 percent. The CNX Midcap and BSE Smallcap indices were down 2-2.5 percent.

Among stocks, power equipment maker BHEL was the biggest loser on Sensex today, down 3.5 percent. Infosys, ITC, HDFC Bank, Sun Pharma, State Bank of India, Tata Motors, L&T, HUL and Maruti Suzuki were other prominent losers, down 1-3 percent.

Bharti Airtel gained 0.5 percent after the block deal in Bharti Infratel (that fell 1 percent). In large trade today, about 5.5 crore equity shares of Bharti Infratel (2.9 percent equity) changed hands in 3 block deals on BSE, NSE at Rs 350-353.65 apiece.

The telecom tower infrastructure services provider yesterday said Bharti Airtel had decided to sell up to 55 million equity shares (with an upsize option of up to 17.5 million additional equity shares) of its subsidiary company Bharti Infratel today.

NTPC bucked the trend, up 5 percent followed by GAIL with 1.6 percent upside. HDFC and ONGC closed with marginal gains.

Meanwhile, there was a big setback to the government in the upcoming spectrum auctions. Supreme Court today restrained government from finalising auction proceedings and issuing licenses to successful bidders, saying notice inviting tenders has some inconsistencies. SC directed government to submit bidding details and says auctions will go on as planned but subject to court orders.

On the global front, European equities trade flat as the markets weigh concerns over greece’s ability to meet its debt repayments commitment to the imf and the european central bank. crude oil sees a decline after yesterday’s sharp rally, as us crude stockpiles hit another record high for the seventh straight week.

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