Sensex ends 261 points lower; IT, FMCG shares drag

Markets ended lower following the expiry of February derivative contracts with IT majors leading the decline along with defensive pharma and FMCG shares. Further, the Railway Budget announcement, which acts as a precursor to the Union Budget, failed to boost the sentiments of the domestic investors.

The 30-share Sensex provisionally ended down 261 points lower at 28,747 and the 50-share Nifty ended down 83 points at 8,684.

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(Updated at 3PM)
Benchmark indices have extended losses in the late noon trades as market participants become wary ahead of the F&O expiry. Also, the Railway Budget announcement, which acts as a precursor to the Union Budget, failed to lift the sentiments of the domestic investors.

At 3 PM, the Sensex is down 284 points at 28,724 whereas the Nifty has lost 87 points at 8,680.

Top losers on the 30-share Sensex include BHEL, Hindalco, Sun Pharma, Baja Auto and Infosys down between 1.6-3%.

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(updated at 3 PM)

Markets came off their day's lows but continued to trade weak in late noon trades weighed down by IT shares and index heavyweights ahead of the expiry of February derivative contracts today.

At 2:30PM, the 30-share Sensex was down 167 points at 28,840 and the 50-share Nifty was down 49 points at 8,718.

Meanwhile, foreign institutional investors were net buyers to the tune of Rs 516 crore on Wednesday, as per provisional stock exchange data.

The Indian rupee continued to extend gains against the US dollar ahead of the Union Budget and dollar selling by banks. The Indian currency was trading higher at 61.88 to the US dollar compared to previous close of 61.96.

Standard & Poor's sharply raised India's growth forecasts for the next several years to reflect a recent change in how gross domestic product is calculated by the government, and said the economy should be a "bright spot" in Asia.

The ratings agency S&P raised its India GDP growth forecast to 7.9% from 6.2% for the year ending March 2016, citing as well rising investment and low oil prices.

RAIL BUDGET

Suresh Prabhu in Rail Budget vowed to make the Indian Railways as the prime economic driver, improvement in passenger safety and amenities along with system improvement and transparency. However, there was not a single new train announced even as he decided to be passenger fare rates unchanged.

The four major goals outlined by Railway Minister Suresh Prabhu in his budget speech today include making a Rail a safer mode of transportm, delivering sustained and measurable improvement in customer experience and to make the Indian Railways financially sustainable. On the operational side he  said that the daily passenger carrying capacity will be raised to 30 million from 21 million, increasing track capacity to 1,38,000 km from 1,14,000 km and hiking annual freight carrying capacity by 50% to 1.5 billion tonne from 1 billion tonne.

Meanwhile, there were some freight hikes in some of the commodities with the highest increase for urea at 10% followed by 6.3% for coal, 2.7% for cement and marginal rise of 0.8% for iron and steel.

IT exporters were among the top Sensex losers on the back of the strengthening rupee. Infosys, TCS and Wipro were down 1-2% each.

Bank shares also witnessed profit taking with HDFC Bank and SBI down 1% each.

Reliance Industries along with infrastructure stocks such as BHEL and L&T  were among the top Sensex losers.

The hike in freight rates on commodities weighed on Coal India, metal and cement companies. Coal India was down 1.6%, Hindalco, Tata Steel, Sesa Sterlite 1-2.7% each.

Among rail-related stocks, Texmaco Rail was down 2.4%, Texmaco Infra was up 1%, Cimmco was down 4.6%, Kalindee Rail down 1.6%. However, Zicom was up 7% on plans to install surveillance cameras in suburban trains to improve women's safety.

In the broader market, the BSE Mid-cap index and Small-cap index were down 0.5% each.

Market breadth was weak with 1,713 gainers and 995 losers on the BSE.