New Delhi, Feb 3 (PTI) Capital goods stocks, including those from infrastructure and railways, slumped on Monday amid the modest increase in capex for FY26 that fell short of expectations.
Shares of Siemens tanked 9.03 per cent, Thermax dropped 7.50 per cent, Hindustan Aeronautics Ltd plunged 6.54 per cent, Bharat Dynamics tumbled 6.44 per cent, Rail Vikas Nigam (6.04 per cent), Inox Wind (5.90 per cent), ABB India (5.46 per cent) and NBCC (4.83 per cent) on the BSE.
The stock of Titagarh Rail Systems declined 4.65 per cent, Larsen & Toubro (4.64 per cent), CG Power (4.33 per cent), Cummins India (3.67 per cent) and Timken India (3.57 per cent).
The BSE Capital Goods index tanked 4.29 per cent to 59,898.65.
The 30-share BSE Sensex declined 319.22 points or 0.41 per cent to settle at 77,186.74, snapping its five-day rally. The NSE Nifty declined 121.10 points or 0.52 per cent to 23,361.05.
Having missed the target for the current financial year, Finance Minister Nirmala Sitharaman on Saturday proposed to spend Rs 11.21 lakh crore towards capital expenditure (capex) for FY26.
However, the capex target is going to be missed by about Rs 93,000 crore for the current financial year.
Against the Budget estimates of Rs 11.11 lakh crore for capex, the government is expected to spend Rs 10.18 lakh crore in Revised Estimates for FY25.
"The Revised Estimate of the total receipts other than borrowings is Rs 31.47 lakh crore, of which the net tax receipts are Rs 25.57 lakh crore. The Revised Estimate of the total expenditure is Rs 47.16 lakh crore, of which the capital expenditure is about Rs 10.18 lakh crore (FY25)," she said while presenting the Union Budget for FY26.
The shortfall in capex is attributed to 2024 being an election year resulting in no activity for 2-3 months. So, there was limited activity for one quarter due to this.
"The three key Budget expectations included the 3Cs of Capex, Consumption and Creation of jobs. But the negative surprise has come from the shift of focus on government capex in infrastructure development. Clearly, the measures taken to boost consumption and provide relief to weaker sections of society have left little headroom with the government for capex allocation.
"The government seem to expect the private sector to do some of the heavy lifting focus with a lot of emphasis on PPP (public private partnership) model in the Budget proposals. Hence, it is not surprising that the capital goods, engineering (including defence, railways), and infrastructure companies are sulking post the Budget," Gaurav Dua, SVP, Head - Capital Markets Strategy at Mirae Asset Sharekhan, had said on the Budget day.
Vinod Nair, Head of Research at Geojit Financial Services, had on Saturday said, "The market has responded to the Union budget with a mixed view, primarily due to the modest 10 per cent YoY increase in capex for FY26, falling short of expectations. Sectors like railways, defence, and infra are affected on which the market relies for the performance, dampening the sentiment." PTI SUM SUM SHW