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Railway stocks dropped as Railway Minister, Pawan Kumar Bansal unveiled the Railway Budget 2013-14 in the lower house of the Parliament.
At 12:45M, the Bombay Stock Exchange's 30-share index Sensex slumped 1% to trade at 19139.22 while the National Stock Exchange's 50-share Nifty declined 1.03% at 5794.50.
Finance Minister P. Chidambaram is planning to cut the public spending target for fiscal 2013 by up to 10 percent from this year's original target, in what would be the most austere budget unveiled in recent history as he tries to avert a sovereign credit downgrade.
Adding to the concerns was the Union Budget's unintended impact on inflationary pressure, which may further dampen the chances for rapid interest rate cuts from the Reserve Bank of India.
Globally, Asian markets traded lower on concern Italy may re-ignite euro-zone concerns after country voted against austerity measures on weekend voting.
Except for the Shanghai Composite which was marginally up, Japan's Nikkei was the top loser down 2.2% followed by Hang Seng, Nikkei, Straits Times and Kospi.
Back home, auto, capital goods, meatl sectors dropped while FMCG, IT gained on BSE.
Select financial shares were down after the RBI announced guidelines for new bank licences. As per the new guidelines, entities with a minimum track record of 10 years would be eligible for licence after clearance from sector regulators, enforcement, investigative agencies such as I-T Department, CBI and ED.
HDFC and ICICI Bank were down over 2% each while SBI was down 1%.
In the oil & gas space, Reliance Industries was down 1.6% and exploration major ONGC was down 1.2%. Other Sensex losers include L&T and Tata Motors.
The broader markets traded negative with mid-caps and small-caps falling nearly 2% on BSE.
The market breadth is negative. Out of 2,671 stocks traded, 1,878 stocks declined compared to 648 advances on BSE.
