Agencies: The Bombay Stock Exchange Sensex slumped over 400 points, while the broader Nifty traded over 130 points lower 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. Shrikan Chouhan of Kotak Securities told NDTV that the Nifty has not only broken the important support of 7,750, but also the important psychological level of 7,700. However, long-term investors should buy on dips, he added.
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 per cent, while BEML traded 5 per cent lower. Titagarh Wagons and Kalindee Rail Nirman were down 5 per cent. These stocks had run-up sharply ahead of the Rail Budget.
Gaurang Shah of Geojit BNP Paribas told NDTV 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 power and realty sub-indices on the BSE slumped over 5 per cent. Metal stocks traded with over 4 per cent losses. On the Nifty, 44 stocks traded lower. State-run BHEL traded 7 per cent lower, while realty major DLF declined 7 per cent. JSPL, Power Grid and Tata Power traded 5-6 per cent lower.
The Sensex and Nifty have run-up sharply ahead of the budget on hopes that Finance Minister Arun Jaitley will deliver a fiscally prudent budget that increases revenue from asset sales while controlling spending. The rally in Indian stocks has been driven by overseas investors, who have bought $10.54 billion or Rs. 65,000 crore worth of Indian shares so far this year.
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