Sensex Falls Sharply; Nifty Drifts Below 8,800

(RTTNews) - Indian shares erased early gains to end sharply lower on Monday as caution set in ahead of derivative contract expiry on Thursday and the Union Budget to be unveiled on Saturday. The Railway Budget will be presented on February 26 followed by Economic Survey on February 27.

The Budget Session, which contains 44 items of financial, legislative and non-legislative business, began today with President Pranab Mukherjee's address to members of both houses of Parliament. In his address, Mukherjee said 'Sab ka Saath, Sab ka Vikas' is the government's fundamental view.

He sought the "cooperation" of all MPs in the smooth conduct of legislative business and enactment of progressive laws, including the controversial land acquisition bill that the government wants passed in this session. "My government attaches paramount importance to safeguard the interest of farmers and families affected by land acquisition," Mukherjee said.

After rising as much as 132 points in early trading, the benchmark index BSE Sensex reversed direction to end the session down 256.30 points or 0.88 percent at 28,975.11. The broader CNX Nifty index fell 78.65 points or 0.89 percent to 8,754.95.

Among the prominent decliners, Tata Steel, SBI, PNB, Grasim Industries, Reliance Industries, Jindal Steel and NMDC fell 2-4 percent. DLF tumbled 3.3 percent on the buzz that it plans to divest around 50 percent stake each in four new housing projects to private equity firms to raise over Rs 3,000 crore.

Hindalco Industries closed 1.3 percent lower, erasing early gains as it won the maximum number of coal blocks in the first phase of coal auction. Syndicate Bank fell 2.4 percent on capital infusion reports.

Infosys shed 0.8 percent on a report it is looking to buy more startups. Wipro edged down 0.2 percent, while TCS advanced 0.9 percent.

MCX climbed almost 6 percent to hit a fresh 52-week high on the back of heavy volume. Realty firm Ashiana Housing soared 11 percent after launching a residential project in Gurgaon.

Monnet Ispat & Energy climbed 9.2 percent after winning a coal block in Chhattisgarh. Godawari Power & Ispat rallied 6.2 percent after it received approval from the environment ministry for iron ore mining in Chhattisgarh.

Kotak Mahindra Bank rose 1.4 percent and ING Vysya gained 0.4 percent after the Competition Commission of India approved the proposed Rs. 15,000-crore merger deal between them.

Hindustan Motors rallied 5.1 percent and Mahindra and Mahindra added a percent. Media reports suggested that Swedish luxury carmaker Volvo is in talks with a clutch of Indian companies to explore the feasibility of utilizing one of their facilities to locally assemble its vehicles in India.

Sesa Sterlite rose 0.6 percent after its subsidiary Balco won the Gare Palma IV/1 coal block in Chhattisgarh for Rs 1,585 per ton. Rajesh Exports closed up 1.5 percent on winning a large export order.

On the global front, Asian stocks rose broadly and the European markets climbed to fresh seven-year highs, buoyed on relief over the last-minute Greek debt deal.

After weeks of tension and uncertainty, Greece reached a deal on extending its bailout program for another four months, averting an immediate default.

The onus now remains on Greece to propose reforms acceptable to its creditors at the EU and IMF ahead of the Monday deadline, which would be assessed and if found sufficient, could be the catalyst for a successful conclusion of the review.