Sensex slumps in late trade

Key benchmark indices tumbled in late trade. The barometer index, the S&P BSE Sensex, fell below 26,000 level after hitting record high in early trade. The Sensex hit one-week low. The 50-unit CNX Nifty hit its lowest level in more than a week. The Sensex was provisionally down 578.32 points or 2.22%, off close to 670 points from the day's high and up about 25 points from the day's low. The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. The BSE Mid-Cap index dropped almost 4%. The BSE Small-Cap index plunged over 4%. The sharp decline on the bourses came after Railway Budget 2014-15 was tabled by Railway Minister Sadananda Gowda in Lok Sabha. The sharp slide on the bourses comes just two days ahead of the Presention of the Union Budget for 2014-15 on Thursday, 10 July 2014.

Bank stocks dropped. Rail stocks plunged after the announcement of Railway Budget 2014-15.

Major announcements in Railway Budget 2014-15 include prioritizing completion of the ongoing projects, proposal to mobilise resources for Railways through surplus of Railway PSUs, FDI and PPP, periodic revision in passenger fare and freight rates which is linked to revisions in fuel prices, proposal to launch bullet trains starting with Mumbai-Ahmedabad sector and a Diamond Quadrilateral Network of High Speed Rail connecting major metros and growth centers of the country. To help mobilization of resources for the railways, the Ministry of Railways is seeking Cabinet approval to allow FDI in rail sector. The bulk of the future projects of the Railways will be financed through PPP mode, including the high-speed rail which requires huge investments. With an increase in both passenger fare and freight rate already announced last month, there was no change in passenger fare and freight rates in the Rail Budget.

As per provisional figures, the S&P BSE Sensex was down 578.32 points or 2.22% to 25,521.76. The index dropped 605.04 points at the day's low of 25,495.04 in late trade, its lowest level since 1 July 2014. The index rose 90.36 points at the day's high of 26,190.44 in early trade, a lifetime high of the index.

The CNX Nifty was down 184.30 points or 2.37% to 7,602.85, as per provisional figures. The index hit a low of 7,595.90 in intraday trade, its lowest level since 30 June 2014. The index hit a high of 7,808.85 in intraday trade, a lifetime high of the index.

The total turnover on BSE amounted to Rs 4279 crore, higher than Rs 4205.06 crore on Monday, 7 July 2014.

The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. On BSE, 2,230 shares declined and 769 shares rose. A total of 97 shares were unchanged.

The BSE Mid-Cap index was down 346.93 points or 3.63% at 9,210.21. The BSE Small-Cap index was down 442.77 points or 4.19% at 10,128.01. Both these indices underperformed the Sensex.

Among the 30 Sensex shares, 27 fell and only three shares rose. Bharat Heavy Electricals (Bhel) (down 7.84%), NTPC (down 5.33%) and Tata Power Company (down 5.27%) edged lower from the Sensex pack.

Bank stocks dropped. Among PSU bank stocks, State Bank of India (SBI) (down 3.94%), Canara Bank (down 4.64%), Union Bank of India (down 8.86%), Bank of India (down 5.74%), Bank of Baroda (down 3.97%) and Punjab National Bank (down 3.98%) declined.

Among private sector banks, ICICI Bank (down 3.58%), Yes Bank (down 3.42%), Federal Bank (down 6.24%), HDFC Bank (down 1.18%), Kotak Mahindra Bank (down 0.65%) and Axis Bank (down 2.95%), declined.

IndusInd Bank dropped 1.47%. The bank announces Q4 results tomorrow, 9 July 2014.

Shares of companies whose fortunes are linked to orders from Indian Railways edged lower after the presentation of Railway Budget. Texmaco Rail & Engineering (down 19.84%), Titagarh Wagons (down 4.99%), Kernex Microsystems (India) (down 4.94%), BEML (down 5%), Kalindee Rail Nirman (Engineers) (down 4.99%), Stone India (down 4.92%), NELCO (down 4.99%), Simplex Casting (down 8.45%), Zicom Electronic Security Systems (down 4.96%) and Container Corporation of India (down 7.12%) edged lower.

A bout of volatility was witnessed as key benchmark indices trimmed gains after opening on a firm note. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both scaled record high. Volatility continued as key benchmark indices reversed initial gains in morning trade. Volatility continued as key benchmark indices weakened once again after cutting entire intraday losses in early afternoon trade as Railway Minister Sadananda Gowda started presenting the final Railway Budget for 2014-15 in Lok Sabha today, 8 July 2014. Key benchmark indices extended losses in afternoon trade. The Sensex extended losses and hit fresh intraday lows in mid-afternoon trade. The Sensex slumped in late trade.

With Railway Budget over, the focus will shift to final Union Budget for 2014-15 due on Thursday, 10 July 2014. Finance Minister Arun Jaitley will present the final Union Budget for 2014-15 in Lok Sabha at 11:00 IST on Thursday, 10 July 2014. Before that, the Finance Ministry will table Economic Survey for 2013-14 tomorrow, 9 July 2014.

There are expectations that the finance minster will announce measures in the Budget aimed at bolstering economic growth. Increase in outlay on infrastructure sector with focus on stricter and time-bound implementation of projects, initiatives towards investments in agriculture and irrigation aimed at easing supply bottlenecks for food-grains, fiscal prudence with roadmap to reduce the fiscal deficit, a roadmap for reducing the subsidy burden and timeline for implementation of the Goods and Services Tax are some of the expectations from the Budget.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.865, compared with its close of 60.0125/0225 on Monday, 7 July 2014.

European shares were trading lower on Tuesday, 8 July 2014, before earnings announcements. Key benchmark indices in UK, France and Germany were down by 0.42% to 0.78%.

Most Asian stocks edged higher in choppy trade on Tuesday, 8 July 2014. Key benchmark indices in China, South Korea, Taiwan and Indonesia rose 0.08% to 0.72%. Hong Kong's Hang Seng was flat. Key benchmark indices in Singapore and Japan were off 0.25% to 0.42%.

Trading in US index futures indicated that the Dow could fall 21 points at the opening bell on Tuesday, 8 July 2014. US stocks fell Monday, 7 July 2014, on profit booking after Dow Jones Industrial Avergae and the S&P 500 index hit record high last week.

Powered by Capital Market - Live News