Sensex falls 264 points on political concerns, oil prices

Mumbai, March 7 (IANS) A benchmark index for Indian equities markets fell 264 points Monday on soaring crude oil prices and concerns of political uncertainty after an ally decided to withdraw its six ministers from Prime Minister Manmohan Singh's United Progressive Alliance (UPA) government.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened in the red at 18,361.65 points, closed at 18,222.67 points, down 1.43 percent or 263.78 points from the previous close of 18,486.45 points.

The benchmark Sensex touched a high of 18,361.65 points and low of 18,058.71 points in the intraday trade.

The 30-scrip Sensex that had gained 4.44 percent last week on the budget proposals, opened the week on a negative note mainly because of concerns of political uncertainty.

The DMK, a southern ally of the ruling coalition, said Saturday it was pulling out of the UPA and that its six ministers would quit after the failure of seat-sharing talks with the Congress for the April 13 assembly polls in Tamil Nadu.

At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty closed 1.36 percent or 75.60 points down at 5,463.15 points.

The weak sentiment was broad-based across indices and spread over smallcaps and midcaps, as also the 13 sector specific indices of the Bombay Stock Exchange (BSE), and all closed in the negative territory.

The BSE midcap index fell 1.41 percent at 6,499.15 points and the BSE smallcap index closed 1.43 percent down at 7,884.86 points.

There was heavy selling pressure in auto and consumer goods stocks. The BSE auto index slumped 2.55 percent and the consumer goods index fell 2.36 percent.

Maruti Suzuki slumped nearly four percent to Rs.1,264.70. Tata Motors, down 3.64 percent at Rs.1,127.25; Reliance Communication, down 3.48 percent at Rs.90.05; BHEL, down 3.21 percent at Rs.2,018.05; and SBI, down 2.87 percent at Rs.2,622.80 were among the major losers on the Sensex.

Only five out of the 30 scrips that constitute the Sensex closed in the positive terrain. Wipro, up 1.04 percent at Rs.446.20; Tata Power, up 0.96 percent at Rs.1,230.35; Cipla, up 0.38 percent at Rs.305.30; NTPC, up 0.34 percent at Rs.179.60 and ITC, up 0.03 percent at Rs.172.55 were the only gainers.

Most other Asian markets also closed in the red on concerns of rising crude oil prices.

The Japanese Nikkei closed 1.76 percent down at 10,505 points and Hong Kong's Hang Seng fell 0.41 percent at 23,313.20.

However the China's Shanghai Composite index advanced 1.83 percent to close at 2,996.21 points.

Most European markets were in the green. Around mid-day, the French CAC 40 was trading 0.23 percent higher and the German DAX was ruling 0.63 percent up. Britain's FTSE 100 was trading 0.65 percent higher.