Friday, June 18, 2021
HomeUncategorizedSensex sinks 600 points after Railway Budget

Sensex sinks 600 points after Railway Budget

The BSE Sensex slumped over 600 points or over 2.25 per cent, while the broader Nifty breached 7,600 after earlier hitting 7,800 for the first time. Analysts attributed profit-booking ahead of the Union Budget for the sharp fall in stock markets.

Selling pressure picked up after Rail Minister Sadananda Gowda announced his maiden budget. Rail stocks, which traded flat ahead of the budget announcement, fell sharply.

Texmaco plunged 17.5 per cent, while BEML, Titagarh Wagons and Kalindee Rail Nirman declined 5 per cent.

These stocks had run-up sharply ahead of the Rail Budget. Over the last three months, Titagarh Wagons shares have gained a whopping 172 per cent, while Texmaco has advanced 82 per cent. Kalindee Rail has gained 98 per cent over the same period.

Tuesday’s fall marked the biggest single-day loss for Indian markets in over 10 months. Analysts told NDTV that a sharp correction in stocks was coming. The Sensex had risen over 2,000 points or nearly 8 per cent since May 16, when Narendra Modi won a historic mandate in elections.

Investors have been buying stocks on hopes that Finance Minister Arun Jaitley will deliver a fiscally prudent budget that increases revenue from asset sales while controlling spending. The rally has also been driven by overseas investors, who have bought $10.54 billion or Rs. 65,000 crore worth of Indian shares so far this year.
Shrikan Chouhan of Kotak Securities told that the Nifty has broken important support levels, but long-term investors should buy on dips. Gaurang Shah of Geojit BNP Paribas told that this is a healthy correction and was long due.

“The announcement of the Rail Budget has nothing to do with the correction. If you are an investor looking at long-term quality stocks, there are no reasons to worry about the correction,” he added.

Cyclical stocks were the biggest losers. The realty sub-index on the BSE slumped over 7 per cent. Power stocks declined 6.4 per cent, while metals ended with 4.2 per cent cut.

On the Nifty, 46 stocks closed lower. State-run BHEL was top Nifty loser (down 8.3 per cent) and was followed by realty major DLF, which fell 7.9 per cent. Power Grid, JSPL and NTPC closed 5-6 per cent lower. Drug maker Sun Pharma, cigarette maker ITC, HDFC and Kotak Mahindra were the only Nifty gainers.

The Sensex closed 518 points down at 25,582, while the Nifty ended 164 points lower at 7,623.

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