Mumbau, February 26
The BSE benchmark Sensex plummeted by 316.55 points — more than 1 percent — to its lowest close at of 19,015.14 in three months on Tuesday as as the rail budget dampened market sentiment amid particularly weak global cues. Blue chips such as ICICI Bank were hit by caution ahead of the 2013-14 budget, although mobile operators rallied on expectations of a cut in airwave auction prices.

The Sensex at one point of time fell below 19,000 level for the first time since November 29, as government announced hike in rail freights, particularly commodities, raising fears of a rise in inflation.

Similarly, the broadbased National Stock Exchange index Nifty dipped below 5,800 level and closed 93.40 points lower at 5,761.35 led by refinery, auto and capital goods, posting a three-month closing low as well as the biggest daily fall since July 23, 2012.

The upcoming FY 2013-14 budget and monthly expiry in the derivatives segment on Thursday were other weakening factors, brokers said.

Besides a weak Asian trend and lower opening in Europe on concern Italy's elections may reignite Europe's debt crisis, further influenced the trading sentiment, they added.

The fall also tracked a sell-off in global equities after Italy's inconclusive election results revived eurozone concerns, sending the MSCI Asia-Pacific index outside Japan down 1.2 percent.

The railways ministry today hiked the basic freight charges of grains, pulses and groundnut oil by nearly six per cent, a move that will lead to a rise in prices of food items.

Shares in wagon manufacturers such as Titagarh Wagons dropped after the government unveiled the railway budget for the year starting in April that was seen lacking big announcements or projects.

Investors are gearing up for the FY14 budget on Thursday, the same day as the expiry of derivatives, which could magnify any volatility.

"The finance minister is certainly going to show fiscal deficit at the lower side. A roadmap to do away with subsidy business would be more important from the markets’ perspective," said Deven Choksey, managing director of KR Choksey Securities.

Bluechip stocks were among the leading decliners as traders lightened positions ahead of the federal budget. India is also due to post its annual economic report on Wednesday, while final economic growth for the October-December quarter are due on Thursday.

ICICI Bank fell 2.7%, while Tata Motors dropped 3.3%.

Shares in wagon manufacturers declined after the 2013-14 rail budget did not result in any big investments as the government looks to keep spending in check. Texmaco Rail and Engineering fell 10.8%, while Titagarh Wagons slumped 8.3%, and Kalindee Rail Nirman Engineers lost 11.2%.

Rail stocks have been in a downtrend, which is a reflection of the poor state of finance of the Indian Railways, which subsidizes passenger fares by over-charging freight fares.

Among other decliners, Ranbaxy Laboratories shares fell 4% after reporting a quarterly net loss of Rs 4.92 billion due to provisioning towards costs that might arise due to a product recall in the United States.

Shares in Jet Airways fell 11.2%, down for a fifth day, on continued concerns about whether the carrier will clinch a deal to sell its stake to Abu Dhabi-based carrier Etihad Airways.

However, shares in Indian mobile network operators rallied with Bharti Airtel gaining 1.6% and Idea Cellular rising 4.1% on expectations the government would be forced to cut the reserve price for airwaves after just one potential bidder emerged for a $7.9 billion spectrum sale next month.

Infosys gained 1.4%, while TCS rose 1.5% on hopes of incentives for exporters in the FY2013-14 budget to be unveiled on February 28. — Reuters/PTI

New Delhi, February 26
Industry bodies today welcomed the rail budget, saying it was a balanced one under difficult economic conditions.

“The emphasis of the railways minister on financial viability and fiscal discipline of Indian Railways is most reassuring and a welcome direction. Financial discipline, safety and passenger amenities are inherent to the health and condition of this mode of transport, which is availed by the common man and the minister has paid due attention to each”, said CII director general Chandrajit Banerjee. “With fuel prices being deregulated, linking freight rates to diesel price hikes is the correct direction to take”, he added.

Dipen Shah, head of private client group research at Kotak Securities, said the rail budget seeks to strike a balance between growth and fiscal discipline. “The budget has announced a few capital expenditure programmes, largely due to low surplus and amid the broader budget constraints. Overall, the railways minister has tried to keep expansion plans within the limits of low revenue growth and overall budgetary constraints”, he added.

Shah noted the market reaction to the budget was tepid.

Didar Singh, Secretary General, FICCI said that the key to moving forward will be execution of the projects announced by the Minister in his budget speech. This year's Rail Budget reflects the difficult economic scenario and contains several proposals which, if implemented, would set a growth multiplier in motion".

Federation of Indian Export Organizations (FIEO) president M Rafeeque Ahmed stated; “An increase in freight rates up to 5 % and the possibility of an imminent hike due to higher fuel costs, in line with the new freight policy, would add on to the cost of inputs and business at a time when there is a general slowdown in the economy with GDP levels plunging to a decade-low of 5%. This may also add to inflation, a prime concern for the government”.

Bangalore, February 26
India's annual economic growth is expected to have slowed to 5.0% in the three months to December due partly to a struggling farm sector, having already struck a near three-year low of 5.3% in the previous quarter, according to a Reuters poll. Forecasts of growth in gross domestic product for the Oct-Dec quarter ranged from 4.5% to 5.6% in the poll of 36 economists.

The latest GDP data is due to be released on Thursday, shortly before the budget.

"The biggest factor this quarter will be a slow pace of growth in agricultural output from the impact of the less-than-normal monsoon in the summer months," said Yuvika Oberoi, economist at Yes Bank. "In addition, the industrial production numbers showed a tepid pace of improvement and the slowdown in the services continued. We also saw government spending has been much lower than the norm in a bid to rein in the fiscal deficit."

Once considered a rising star in Asia, the Indian economy has lost its shine in recent years. Preliminary estimates released earlier this month showed growth dwindled to an annual 5% rate in the current fiscal year to March. That would be the slowest growth rate in Asia's third largest economy in a decade and if confirmed, underscores the need for further policy reforms and monetary easing to spur investments, say economists. — Reuters

Mumbai, February 26
Ranbaxy Laboratories Ltd, India's top drugmaker by sales, said its base business would grow a modest 10% in 2013 after reporting a surprise quarterly loss on product recall charges, sending its shares down more than 4%.

Controlled by Japan's Daiichi Sankyo Co, Ranbaxy reported a quarterly net loss of Rs 4.92 billion after setting aside Rs 1.86 billion towards recall costs. Analysts on average had estimated consolidated net profit at Rs 1.44 billion on net sales of Rs 26.96 billion, according to Thomson Reuters I/B/E/S.

The drugmaker in November voluntarily recalled its cholesterol lowering generic of Lipitor from the US market after it discovered contamination with tiny glass particles in certain lots of 10mg, 20mg and 40mg doses of the drug.

"This is really bad. This raises serious questions about transparency," said Daljeet Kohli, head of research at brokerage IndiaNivesh. "The company has been saying that this recall was voluntary and now it has made a huge provision for costs, which is not a good thing for any company to do."

After the product recall, Ranbaxy's market share of generic Lipitor fell to less than 3%, according to industry estimates. The drugmaker has now resumed supplying the US.

The company said it expects to achieve sales of over Rs 120 billion in the current fiscal ending December, compared to Rs 124.6 billion reported in 2012.

Q4 NUMBERS DISAPPOINT: Ranbaxy said consolidated sales fell 28.8% to Rs 26.71 billion in the fiscal fourth quarter ended December. Sales in its key North America market fell to Rs 8.51 billion in October-December compared to US $407 million in the year earlier when the company gained from exclusive rights to sell generic Lipitor in the US. — Reuters

New Delhi, February 26
With no bidders coming forward to be part of the GSM spectrum auction planned by the government for March, the department of telecom has postponed the auction for the airwaves in the 1800 and 900 MHz bands and instead will start the auction of CDMA spectrum on March 11.

The government was hold the GSM auction from March 11 and the CDMA spectrum auction was scheduled to start after completion of GSM airwaves auction.

With none of the operators in the GSM band coming forward to apply to be part of the bidding, the process for which got over yesterday, the government today came out with a statement that it would now place the issue before the Empowered Group of Ministers (EGoM) for it to decide on the further course of action.

A statement issued by DoT said: "1,800 and 900 MHz bands (used for GSM) were to be auctioned simultaneously starting from March 11, 2013 and the 800 MHz band auction was to commence two days after the conclusion of the auction of 1,800 and 900 MHz spectrum. In the light of developments, the auction of 800 MHz spectrum will commence on March 11, 2013 itself".