Key benchmark indices extended losses in afternoon trade as Railway Minister Sadananda Gowda was presenting his maiden Railway Budget in Lok Sabha. The barometer index, the S&P BSE Sensex, fell below 26,000 level. The Sensex was down 142.95 points or 0.55%, off close to 233 points from the day's high and up about 60 points from the day's low. The market breadth indicating the overall health of the market was weak.
Shares of companies whose fortunes are linked to orders from Indian Railways were mostly lower. Real estate stocks tumbled.
Gowda said the Rail ministry is seeking Cabinet nod to allow foreign direct investment (FDI) in the sector. He also said that the government needs to revise passenger fares periodically. Gowda said bulk of future projects will be financed via public-private partnership (PPP) route.
At 13:15 IST, the S&P BSE Sensex was down 142.95 points or 0.55% to 25,957.13. The index dropped 202.75 points at the day's low of 25,897.33 in afternoon trade, its lowest level since 4 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 55.40 points or 0.71% to 7,731.75. The index hit a low of 7,717.40 in intraday trade, its lowest level since 4 July 2014. The index hit a high of 7,808.85 in intraday trade, a lifetime high of the index.
The market breadth indicating the overall health of the market was weak. On BSE, 1,834 shares declined and 953 shares rose. A total of 96 shares were unchanged.
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The BSE Mid-Cap index was down 77.69 points or 0.81% at 9,479.45. The BSE Small-Cap index was down 128.40 points or 1.21% at 10,442.38. Both these indices underperformed the Sensex.
Among the 30 Sensex shares, 23 fell and the remaining shares rose. Sesa Sterlite (down 3.69%), Coal India (down 2.37%), Larsen & Toubro (down 2.15%), NTPC (down 1.83%), Mahindra & Mahindra (down 1.79%), ONGC (down 1.53%), Tata Steel (down 1.37%), ICICI Bank (down 1.36%), Reliance Industries (down 1.34%), State Bank of India (down 1.34%), Hindalco Industries (down 1.26%), TCS (down 1.14%), Maruti Suzuki India (down 1.06%), Wipro (down 0.95%) and Axis Bank (down 0.85%), edged lower from the Sensex pack.
HDFC (up 1.81%), Cipla (up 1.71%), Sun Pharmaceuticals Industries (up 1.71%), GAIL (India) (up 0.46%), Dr Reddy's Laboratories (up 0.27%), HDFC Bank (up 0.27%), ITC (up 0.22%) and Hindustan Unilever (up 0.21%), edged higher from the Sensex pack.
Real estate stocks tumbled. Phoenix Mills (down 4.16%), Prestige Estates (down 4.01%), Sobha Developers (down 3.38%), Peninsula Land (down 2.74%), Anant Raj (down 2.36%), DLF (down 2.08%), Parsvnath Developers (down 1.61%), D B Realty (down 1.51%), Unitech (down 1.08%), Oberoi Realty (down 0.73%), Godrej Properties (down 0.33%) and Indiabulls Real Estate (down 0.05%), edged lower.
Rail stocks were mostly lower. Titagarh Wagons (down 4.99%), Kernex Microsystems (India) (down 4.94%), Stone India (down 4.8%), BEML (down 4.11%), Kalindee Rail Nirman (Engineers) (down 3.92%), NELCO (down 3.27%), Simplex Casting (down 3.17%), Zicom Electronic Security Systems (down 1.64%), Bharat Heavy Electricals (down 1.15%) and Container Corporation of India (down 0.23%), edged lower.
However, Transformers & Rectifiers (India) (up 2.84%) and Hind Rectifiers (up 0.42%), edged higher.
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. The Sensex regained 26,000 mark after falling below that level for a brief period 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.
Gowda said the Rail ministry is seeking Cabinet nod to allow foreign direct investment (FDI) in the sector. He also proposed to introduce bullet train between Mumbai-Ahmedabad and to raise train speeds between several cities to 160-200 km per hour. The Railway Minister proposed to spend Rs 100 crore for high speed trains between metros.
Gowda said that the government needs to revise passenger fares periodically. Gowda said bulk of future projects will be financed via public-private partnership (PPP) route. The Railways Minister said the government has taken up connecting ports as priority via PPP mode. The minister will interact with Industry and take further steps to attract investment under PPP mode through BOT and annuity route and 8 to 10 capacity augmentation projects on congested routes will be identified for this purpose. He also proposed to monetize land assets for commercial utilization.
Gowda announced a slew of measures for online booking of tickets and availability of food on trains and stations. Gowda said that the scope of online booking would be extended.
Gowda said he has been flooded with requests for new trains. Stating that Railways will play a role in building a dynamic India, Gowda said that he aims to make India the largest freight carrier of the world. "Railways are carrying 31% of total freight currently. Railways carried 1.3 billion tn of freight last year. It is growing rapidly," Gowda said.
Gowda said that a surplus of Rs 602 crore is estimated for the Raiwalys in FY 2015. The market borrowing of Railways is estimated at Rs 11790 crore for FY 2015, he said.
The Railway minister said that out of 676 projects sanctioned, only 356 remain completed. Railways will require Rs 5 lakh crore to complete ongoing projects, he said. Gowda added that the ministry is prioritising time lines to finish pending projects.
The current week is a crucial period for Indian financial markets. The Finance Ministry will table Economic Survey for 2013-14 tomorrow, 9 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. After a clear mandate in Lok Sabha elections this year and with BJP perceived as a business friendly party, expectations from the Budget are running high.
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 59.77, compared with its close of 60.0125/0225 on Monday, 7 July 2014.
European shares were trading lower in early trade on Tuesday, 8 July 2014. Key benchmark indices in UK, France and Germany were down by 0.09% to 0.20%.
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 0.75%. Key benchmark indices in Singapore Hong Kong, and Japan were off 0.16% to 0.42%.
Trading in US index futures indicated that the Dow could fall 16 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.
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