Railway stocks crash after budget

Indian markets brushed aside the tepid Railway Budget presented by Minister Suresh Prabhu and continued their downward trajectory as analysts were unable to find anything bullish for stocks at first glance.

The Nifty crashed below the crucial 7,000-point support in afternoon trade and quoted at 6,976, down 41 points. The end of the monthly expiry of derivatives contracts also put intense pressure on stocks.

Analysts said the budget's targets looked ambitious against the backdrop of meagre revenue picture of the Railways.

Meanwhile, Prabhu told Parliament the Railways had planned for the following goals in the year to March 2017:

* Operating Ratio of 92 percent.
* Capacity expansion plan of 1.21 lakh crore rupees.
* Life Insurance Corp to invest 1.5 lakh crore rupees in Railways over 5 years.
* Track electrification of 2,000 km.
* To set up 2 locomotive factories with an order book of 40,000 crore rupees.
* Two new freight corridors to be set up
* To lay more emphasis on existing corridors being constructed.
* Announced 44 new projects
* Prabhu remained quiet on a possible hike in passenger fares.

Stocks of companies dealing with the Railways across its spectrum fell sharply. Wagon makers Titagarh, Kalindee and Tex Rail dropped 5 percent each. Electrical equipment makers Siemens and BEML edged lower. Railway Infrastructure providers GMR Infra and Lanco Infratech slipped in trade as well.

(Image: Indiatimes)