Sensex slips below 19000 on Europe woes; Oil & Gas drops 3%

Indian equity benchmarks fell quite sharply in afternoon trade with the Sensex losing more than 300 points following drop in European markets. The 50-share NSE Nifty broke the 5800 level for the first time since November 29, 2012. The proposed freight hike in the railway budget too dented sentiment.

The index slipped 103.65 points or 1.77 percent to 5,751.10. Meanwhile, the 30-share BSE Sensex plunged 346 points to 18,986, impacted majorly by financials, oil & gas, auto and metals.

European markets namely CAC, DAX and FTSE went down between 1-2 percent after elections in Italy left the country facing political deadlock, with banks suffering the most as the vote raised new fears over the euro zone's debt crisis.

Back home, the government proposed a hike of five per cent freight rate in the rail budget which might increased burden on the corporate earnings. Share prices of companies that cater to the railway sector were under pressure and tanked up to 8 percent as Railway Minister Pawan Kumar Bansal delivered his maiden Rail Budget in the Lok Sabha.

Brokers said there was no benefit announced for the railway wagon makers which dampened the sentiment further. Kalindee Rail Nirman was the largest loser and dropped 8.10 percent on the BSE, followed by Hind Rectifiers which dropped 6.71 percent and Kernex Microsystems which fell by 6.42 percent. Among others, Stone India tanked 6.53 percent, Titagarh Wagons was down 5.65 percent, Texmaco Rail (down 4.87 percent), Zicom Security (down 3.60 percent) and BEML (down 2.17 percent).

Midcaps and smallcaps crashed for the second consecutive session, with the indices down around 2 percent.

The BSE Oil & Gas index hit quite badly, falling more than 3 percent. Meanwhile, Auto, Metal, Capital Goods and Realty indices were down 2-2.5 percent.

About 1,186 equity shares declined as against 256 shares advanced on the National Stock Exchange.

(With inputs from Reuters and PTI)