The S&P BSE Sensex plunged over 260 points as the Railway Budget announcement, which acts as a precursor to the Union Budget, failed to lift the sentiment.
Also, profit-taking in software stocks such as Infosys Ltd and the expiry of February derivative contracts and caution ahead of federal budget on Saturday weighed on the sentiment.
The 30-share BSE index Sensex plunged 261.34 points or 0.9 per cent at 28,746.65 and the 50-share NSE index Nifty fell 83.4 points or 0.95 per cent at 8,683.85.
On hike on coal freight charge, cement manufacturers to see costs goup by about Rs 1/bag
— Rajalakshmi Nirmal (@crajalakshmic)
Among BSE sectoral indices, auto index fell the most by 1.43%, followed by IT 1.43%, capital goods 1.31% and TECk 1.21%, while realty index was up 0.33%, infrastructure 0.18% and oil & gas 0.04%.
Major Sensex losers were BHEL 3.47%, Sun Pharma 2.85%, Infosys 2.53%, Cipla 2.51% and Hindalco 2.48%, while the top five gainers were NTPC 4.9%, GAIL 1.57%, ONGC 0.63%, Bharti Airtel 0.47% and HDFC 0.35%.
"Railway budget led disappointment would not live for long as Modi's federal budget would be a big positive," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
Investors are expecting the government to unveil innovative ways to propel investments in the country, he added.
Watch out for action in railway stocks today ahead of the railway budget- Titagarh Wagons, Container Corporation, Kalindee Rail Nirman
— Rajalakshmi Nirmal (@crajalakshmic)
February 26, 2015Railway-related stocks fell due to lack of details on big investment plans in the railway budget, traders said.
Wagon makers too slumped.
A report by SMC Investments and Advisors said "The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month February 2015 series to March 2015 series. Asian stocks rattled between highs and lows between Yellen testimony and Aussie slide. US stocks remained stable near all time highs. US new home sales dipped by just 0.2 per"cent to an annual rate of 481,000 in January from the revised December rate of 482,000. While new home sales pulled back off the more than six-year high set in the previous month, the rate still far exceeded economist estimates of 470,000. The Commerce Department noted that the annual rate of new home sales in January is 5.3 per cent above the estimate of 457,000 in the same month a year ago."
European stocks were seen steady at the open on Thursday, as investors focused on a flurry of corporate results from blue-chips, including Anheuser-Busch InBev, Allianz and Deutsche Telekom.
At 0701 GMT, futures for Euro STOXX 50, for Germany’s DAX and for France’s CAC were up 0.1 per cent.
Asian shares prices edged away from five-month highs on Thursday, while the dollar steadied after slipping on Federal Reserve Chair Janet Yellen’s indication that the US central bank is in no hurry to hike interest rates.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell about 0.2 per cent, as investors took profits after Yellen’s testimony and a China factory survey’s better-than-expected headline number lifted it to a five-month high on Wednesday.