Mumbai: The BSE Sensex fell over 1 per cent on the first day of week as it looked worried over rates cut in April post Budget considering high oil prices. Political uncertainties also added to the woes, after Prime Minister Manmohan Singh accepted Dinesh Trivedi's resignation as Railway Minister.
Both traders and investors squared off their positions that built up before the Budget as they believe it was realistic and retrospective but not reformist.
The 30-share BSE benchmark fell 192.83 points or 1.10 per cent, to close at 17,273.37, weighed down by 24 stocks. Meanwhile, the 50-share NSE Nifty went down 60.85 points or 1.14 per cent to 5,257.05, dragged down by capital goods, banks, technology, oil & gas and capital goods stocks.
The Sensex shed more than 400 points in two days. According to Vibhav Kapoor of IL&FS, a lot of people who bought in anticipation of the Budget are selling out right now and that is leading to this correction over the last two days.
"The Budget has probably put some doubts in the minds of investors as to whether you are going to have rate cut in April itself. So there is a possibility that the rate cuts might get a little bit delayed maybe by a month or two and that is also one reason why the markets have reacted negatively. A lot is going to depend upon the determination of the government to raise fuel prices. The market does recognise that it's a pretty difficult task given the political implications and the political situation," he reasoned.
All sectoral indices closed lower barring FMCG and healthcare. The BSE Realty, Power, Capital Goods and Bankex were down 2-2.6 per cent. IT Index was down 1.65 per cent and Oil & Gas fell 1.27 per cent.
Tata Consultancy Services, country's largest software services exporter plunged nearly 4 per cent as investors post meet with the company says, TCS is likely to see muted Q4 and Q4 volume growth is expected to be lower than Q3. Its rival Infosys and Wipro dropped 1 per cent each.
Index heavyweight and India's most valued stock Reliance Industries slipped 2.2 per cent after reports that the company's KG-D6 gas output hit all time low as it shut 6 wells. RIL shut 6 wells due to water & sand ingress.
Banking major State Bank of India was down 3 per cent whereas rival ICICI Bank and HDFC Bank fell 2.2 per cent and 0.9 per cent, respectively. Housing finance company HDFC dropped 2.2 per cent.
Shares of Union Bank of India tumbled 4.4 per cent post Moody's downgraded the stock by one notch from BA1 to BA2 due to weak asset quality and insufficient loss-absorption.
Infrastructure Development Finance Company crashed 5 per cent post Morgan Stanley downgraded the stock to underweight with a target of Rs 120. The research firm believes that from here on the scope for earnings leverage from higher margins is low, and a slowdown in loan growth could hurt earnings growth.
State-run capital goods major Bharat Heavy Electricals tanked nearly 5 per cent while engineering and construction company Larsen & Toubro was down 1.8 per cent.
However, ITC topped the buying list since Budget session as hike in excise duty was in line with expectations; the government imposed 10 per cent ad valorem duty on 50 per cent of MRP of cigarettes (less than 65 mm), which amounts to 15 per cent excise increase for the company. The stock rose 2 per cent. FMCG major HUL gained 0.7 per cent.
Tractor maker M&M rose 1.7 per cent after the government increased agricultural credit target to Rs 5.75 lakh crore from Rs 4.75 lakh crore. Even the interest subvention scheme for providing short term crop loans to farmers at 7 per cent interest per annum will be continued in 2012-13 and an additional subvention of 3 per cent will be available to prompt paying farmers, says FM during Budget speech.
Sun Pharma, country's largest pharma company by market cap gained 1.7 per cent on short covering. It had fallen over 7 per cent on Friday as minimum alternate tax extended to partnership firms in the Budget.
The broader markets like BSE Midcap & Smallcap indices too were down 1 per cent each. Declining shares outnumbered advancing by 1027 to 421 on the National Stock Exchange.
Kingfisher Airlines fell 3 per cent after the service tax department is contemplating taking the company to court. Dues to the tune of Rs 76 crore are pending to be paid by Kingfisher to the service tax department. The stock tumbled 25 per cent in a month.
Atlas Cycle Industries shot up as much as 18 per cent intraday before closing up 7.65 per cent post Finance Minister Pranab Mukherjee increased basic customs duty on bicycles from 10 per cent to 30 per cent and on bicycle parts from 10 per cent to 20 per cent. It was also among the most active shares.
Standard Chartered rose 6.32 per cent after the government permitted two-way fungibility in Indian Depository Receipts subject to a ceiling with the objective of encouraging greater foreign participation in Indian capital market.
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