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Double trouble for stocks

Mumbai, Feb. 26: A lacklustre rail budget and apprehensions over a political gridlock in Italy today led to the Sensex plunging 316 points to a three-month low of 19015.14.

Railway minister Pawan Kumar Bansal today raised freight rates by around 5 per cent and kept passenger fares unchanged.

“India’s railway budget presented two days ahead of the Union budget has turned out to be largely a non-event. There were no fireworks in the rail budget,” Sonal Varma, economist at Nomura, said.

She added that the Union budget for 2013-14 could be a mix of prudence and populism to avert the risk of a backlash ahead of the elections next year.

Cues from the overseas markets were not encouraging. An inconclusive result of the parliamentary elections in Italy led to fears that the crisis in Europe could linger. This was reflected in global indices, which remained in the red during the day. Asian markets ended 1-2 per cent lower, while the European indices were trading with deep losses of 1.5 per cent in the noon.

The Sensex, which opened lower at 19290.66 because of weak Asian cues, dropped to a low of 18976.94 before settling at 19015.14, wiping out over Rs 1 lakh crore of investor wealth in the process. This was its lowest close since 18842.08 on November 27, 2012.

The 50-issue CNX Nifty of the National Stock Exchange plunged 93.40 points, or 1.60 per cent, to end below 5800 at a three-month low of 5761.35.

Twenty-five out of 30 Sensex scrips ended in the negative territory, with the shares of Reliance Industries, HDFC, Tata Motors and ONGC ending lower by 3-4 per cent each.

Railway-linked stocks such as Kalindee Rail Nirman, Texmaco Rail, Stone India, Kernex and Titagarh Wagons witnessed brisk selling pressure and fell between 8 per cent and 16 per cent.

While most of the BSE sectoral indices ended in the red, the losses were led by the BSE oil and gas index that dropped over 3 per cent. It was followed by the auto, capital goods and small cap indices.

 
 
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