The market activity was almost a mirror image of the previous day. The Sensex was stuck in a tight range of around 150 points before ending at 16255, down 30 points and the Nifty closed at 4861, weaker by eight points. The mid-cap and small-cap indices ended marginally lower.
The Railway budget turned out to be a damp squib for the markets. The Railway Minister, Mamata Banerjee, presented a rather populist budget. She kept the passenger and freight rates unchanged, while cutting the freight rates for food grains and kerosene. Railway stocks, which had risen between 1% and 3% in the morning, saw a sell-off post the event.
"The Railway Budget 2010-2011 was a non-event from the markets perspective even though it was overall positive in its intent and future direction. The budget was devoid of any major populist measures and focused on developing and improving the Railway Infrastructure. The budget announced its intent to release the 10-year ‘Vision 2020’ document to further widen and strengthen the Infrastructure. Another key positive spelled out in the Budget was emphasis on inviting domestic investments through Public-Private-Partnership, which will provide opportunities to the private sector. Further, to strengthen Railway Freight, the budget inked out its intent to unveil a new policy to set up private freight terminals and multi- modal logistics and Mega logistics hubs, which would be beneficiary for the rail container operators. A status quo has been maintained from the industry’s (Steel, Cement, Coal etc.) perspective, as the freight tariffs were left unchanged. Thus, overall the Budget can be summed up as a positive one." says Dinesh Thakkar, chairman and managing director, Angel Broking.
Kalindee Rail Nirman Engineers and Kernex were frozen at the 5% lower circuit at Rs 183 and Rs 151 respectively. Titagarh Wagons ended at Rs 374, down 7.5%, and Stone India closed at Rs 59, lower by 6%. Container Corporation was the only exception, ending higher by 1.4% at Rs 1198.
Cement stocks rose and steel stocks recovered from their intra-day lows as the Railway Budget left the freight rates unchanged. ACC and Ambuja Cements in the cement space, and SAIL and Hindalco among metal stocks edged higher.
Amar Ambani, VP Research, India Infoline, gave a thumbs-up to the Railway Budget for putting in place Vision 2020 for setting up 1,000 km lines per year, a five-fold jump from the average of the last 50 years, and initiating moves for involving the private sector through the PPP route.
Auto stocks extended their previous day's losses on fears of an excise hike in the upcoming budget. Mahindra & Mahindra ended lower by 2.4% at Rs 956 , while Tata Motors and Hero Honda shed around a per cent each at Rs 687 and Rs 1678 respectively.
New debutant, DB Realty recovered from its post-listing jitters to end lower by 2% at Rs 455. The realty firm had earlier made its debut at Rs 430, a discount of 8.11% to the issue price of Rs 468.
The other listing, Emmbi Polyarns tumbled by 36% to Rs 28 against the issue price of Rs 45. The stock listed at Rs 45, only to lose its way in the mid-session.
On the other hand, Maruti topped the gainers list on the BSE. The auto major reversed earlier losses to end 2.3% higher at Rs 1368. NTPC and L&T ended around a per cent up at Rs 204 and Rs 1499 respectively.
And REC brightened post its FPO issue to end at Rs 223, higher by 4%.
The market breadth was negative. Out of 2,873 shares traded on the BSE, there were 948 advancing stocks as against 1851 declines.
Tata Steel topped the value charts on the BSE with a total turnover of Rs 78.48 crore. This was followed by Reliance (Rs 53.48 crore), DLF (Rs 48.50 crore), L&T (Rs 47.14 crore) and ICICI Bank (Rs 35.74 crore).
Hindalco led the volume charts with trades of 2.10 million. It was followed by DLF (1.68 million), Tata Steel (1.37 million), NTPC (1.08 million) and Jaiprakash Associates (1.02 million).
