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Last Updated : Feb 28, 2013 08:40 PM IST | Source: Moneycontrol.com

Sensex nosedives 290 as Budget 2013 flops; banks hammered

Equity indices crashed to fresh three-month lows Thursday, after the final Budget of UPA-II fell way short of market expectations. Brokers said the sell-off could have been aggravated because of derivatives expiry, and the liquidity problems being faced by some corporates and traders.


Moneycontrol Bureau


Equity indices crashed to fresh three-month lows Thursday, after the final Budget of  UPA-II fell way short of market expectations. Brokers said the sell-off could have been aggravated because of derivatives expiry, and the liquidity problems being faced by some corporates and traders.


The BSE Sensex shed 290 points to close at 18,861, and the Nifty fell 103 points to end the day at 5693.


Get full Budget coverage.


Shares from the power, capital goods and banking sectors were battered the most, as the Budget did not give any clear roadmap as to how economic growth and the investment cycle would be revived.


Among the positives in the Budget, the Finance Minister delivered on the fiscal consolidation and a stable tax regime. But market was expecting much considering that the Finance Minister had marketed the Budget aggressively to foreign investor.


Bank shares, especially public sectors ones, were battered as market viewed the higher agriculture credit target and continuation of interest rate subsidy on short term crop loans and extending it to private sector banks as well, as  negatives. But investment experts said market may have overreacted to these proposals. Yet, if growth does not pick in the coming months, banks could have a serious problem in terms of non-performing assets.


Shares of SBI, PNB, Axis Bank, Bank of Baroda and ICICI Bank fell between 4-6 percent. ADAG stocks were badly hammered today, losing around 8-10%. Out of the pack, Reliance Infra fell 9.3%, Reliance Communication dropped 11.8% while Reliance Industries slipped 2%.


Midcaps continued to get pummeled, with many players suspecting the slide to be triggered by sale of pledged shares/speculative positions that had been created to ramp up the stock price. The BSE Midcap index fell 2.5 percent, and the BSE Smallcap index nearly 2 percent.


Shares of Core Education, which have fallen over 80 percent this week, extended its losing streak, shedding another 9 percent to close at Rs 54.


And while the Budget may have had many announcements for attracting domestic/foreign money into the stock market, none of them appeared solid. Shares from the IT, FMCG and healthcare sectors fared better as investors sought refuge in defensive stocks.


Shares of Nestle India, United Spirits, Titan Industries, GlaxoSmithkline Pharma and Mahindra Satyam gained between 1-2 percent.


Jet Air shares started off on a firm note on hopes that the stake sale deal with Etihad will fructify. However, profit taking trimmed much of the gains and the stock closed marginally higher at Rs 540.

MCX shares rose 1.5 percent as the Commodities Transaction Tax of 0.01 was much lower than what the market had feared.



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First Published on Feb 28, 2013 04:04 pm
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