Nifty derails below 7,000 on F&O expiry; Rail Budget fails to cheer

The S&P BSE Sensex ended the session at 22,976 , down 113 points while the Nifty50 closed down by 48 points at 6,971- fresh 52-week closing low

Benchmark share indices extended losses to end lower for the third straight day on caution ahead of the Union Budget even as the Rail Budget pleased both passengers and industry by maintainin status-quo on fare and freight rates.

Further, weakness was seen in late trades as traders turned cautious following the expiry of February derivative contracts.

The S&P BSE Sensex ended the session at 22,976 , down 113 points while the Nifty50 closed down by 48 points at 6,971- fresh 52-week closing low.

The broader markets, however, underperformed their larger peers with BSE Midcap and Smallcap indices closing down by 1.14% and 0.9% respectively.

“It is not a surprise to see Nifty ending below 7,000 today", said Deven Chowksey, managing director, KRChoksey Shares and Securities. “Today’s close below 7,000 is the influence of Railway Budget, wait-and-watch approach, and lack of buying interest has culminated to Nifty ending below 7,000. “

Going forward he said, “We expect Nifty to trade in the range between 6,800-7,250.”

STOCK TRENDS POST RAIL BUDGET

Post the Railway budget, stocks related to railway traded in a volatile manner.  

Wagon makers Kalindee Rail, Texmaco Rail, and Titagarh Wagons dropped between 4-6% each. Other railway related stocks such as Hind Rectifiers, Stone India, Simplex Castings, Kernex Microsystems eased between 1%-8% each.

Stocks of cement companies ended lower as well.  ACC, Ultratech Cement, Ambuja Cement, JK Cement slipped 0.1%-2% each.

Shares of Logistic companies are trading positive: Container Corporation of India up 0.4%, Gateway Distripacks up 1%, Allcargo Logistics up 1%, Gati up 0.7% and Timken up 2%.

Shares of railway-related technology firms are trading mixed. MIC Electronics ended up 3%, Zicom Electronic closed up 5% and Stone India ended down 2%. Zicom Electronic gains on Rail Budget proposal for CCTV set up for surveillance.

Stocks of cement companies are trading mixed.  Acc (down 1.5%), Ultratech Cement (up 0.2%) , Ambuja Cement (0.3%), JK Cement (down 2%), Shree Cement (up 0.2%).

Largely the shares of steel companies are trading positive with JSW Steel, Tata Steel, SAIL trading between 0.1%-1%. However, JSPL has bucked the trend and has dipped by 2%.

The Railway minister announced a proposal to start WiFi services at 100 stations in this year and up to 400 stations in the next two years. D-Link (India) jumped 4%.

Gateway Distriparks gained as Railway Minister announced to develop rail site Logistics Park. Allcargo Logistics ended

Zicom Electronic Security Systems jumped 7% on the BSE after the Rail Budget proposed to setup CCTV for surveillance.

Shares of Smartlink Network Systems zoomed nearly 18% after the a meeting of the Board of Directors of the Company will be held on February 29, 2016 to consider the proposal to buy-back the fully paid-up equity shares.

Among other prominent stocks, shares of IDBI Bank gained strength by 3% as the company received markets regulator Sebi's approval to raise Rs 3,771 crore through issuance of shares to qualified institutional players (QIPs).

Castrol India dipped 6% after the company reported a single digit 6.7% year on year (yoy) growth in net profit at Rs 141 crore for the quarter ended December 31, 2015 (Q4CY15), due to lower operational income. The company had profit of Rs 132 crore in the same quarter year ago.

GLOBAL MARKETS

Asia markets closed mixed with Shanghai Composite tumbling over 6%- its biggest one-day loss in a month. The bearish sentiment spilt over into Hong Kong, where the benchmark Hang Seng index .HSI dropped 1.6% and the Hong Kong China Enterprises Index .HSCE was off 2.4%

European shares firmed up after encouraging earnings from UK-based bank Lloyds boosted investor sentiment. The FTSE-100 was the top gainer among major indices up 1.7% followed by CAC-40 and DAX which gained 0.6%-1.2% each.