Market update: Sensex slumps over 261 points after Railway Budget disappoints

The benchmark Bombay Stock Exchange (BSE) index Sensex on Thursday plunged by over 261 points, logging its worst fall in two weeks, to close below the 29,000-mark after the Railway Budget disappointed market participants.

Besides, winding up of positions by participants on the last session of February's expiry in the derivatives segment, hit trading sentiments in the domestic market, brokers said.

Stocks of cement, coal and steel companies suffered losses following hike in railway freight rates by up to 10 per cent.

With Railway Minister Suresh Prabhu sparing passengers from any hike in fares, the equity market was abuzz with speculation that the Union Budget - which is scheduled to be presented by Finance Minister Arun Jaitley on Saturday - will have a populist tilt, brokers added.

The broader National Stock Exchange (NSE) index Nifty slipped below the crucial 8,700-level by falling 83.40 points (or 0.95 per cent) to close at 8,683.85. Intra-day, it shuttled between 8,669.45 and 8,786.05.

Shares of railway-linked companies came under pressure. While measures proposed in the Rail Budget such as reviewing the wagon-making scheme aim to make it attractive for private investors, profit-booking set in.

Major losers were Texmaco Rail (-2.51 per cent), Kalindee Rail Nirman (-4.05 per cent), Stone India (-7.01 per cent), Simplex Castings (-4.26 per cent) and BEML (-1.65 per cent). Stocks of cement firms such as ACC, Ultratech and Ambuja cement slipped following freight hike announcement.

Among the 30-Sensex scrips, 24 ended lower, five closed higher, while Hero MotoCorp closed unchanged.

Meanwhile, foreigners bought shares worth Rs 516.06 crore and domestic institutional investors bought shares worth a net Rs 19.60 crore on Wednesday, as per provisional data.

Globally, other Asian markets closed higher and European indices climbed in their opening trade.

Among sectoral indices, Auto, IT, Capital Goods, Healthcare, FMCG, Metal, Consumer Durables and Power fell up to 1.43 per cent. The Small- and Mid-cap indices also ended in negative territory zone.