Sensex slumps on DMK-Congress row

After cheering the Budget last week, the Indian market resumed their southbound journey amid fresh trouble for the UPA II regime. Sentiment was also hit by a fresh spike in crude oil amid continued violence in Libya and other parts of the Middle East.

The market witnessed a gap down opening after the DMK said that it was withdrawing its ministers from the Cabinet, ostensibly on differences over seat-sharing for the upcoming TN assembly polls.



Markets remained under pressure for the first half of the day. However, the stocks began to recover in the mid-afternoon trades led by select IT, Metals and Oil & Gas stocks.

Auto, Capital Goods, Realty and Banking stocks were among the major laggard.

The Mid-Cap and Small-Cap stocks closed in the red as well. Only FMCG stocks managed slim gains.

"The souring of the DMK-Congress ties unnerved the markets today but some media reports suggested that the two partners were considering rapproachment. If that does turn out to be true, the market will rebound tomorrow. Another big factor right now is crude oil and one has to see if there is any relief on this front," says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The BSE Sensex lost 264 to end at 18,223 and the NSE Nifty lost 75 points to close at 5,463.

In global action, markets in Asia closed mixed. Stock benchmarks in China and Singapore closed higher while the rest of the important markets in the region ended in the red amid persistent worries over rising crude oil prices.

The European markets were trading almost unchanged, the FTSE index was up 0.4%, CAC index was flat and DAX index also was up 0.2%.

The notable top losers on the BSE and NSE were Tata Motors, BPCL, Maruti, BHEL, R Com, Sun Pharma, Axis Bank, ONGC, DLF and Sail, while Dr Reddy, Cairn, Wipro, Rel Power, Tata Power, ITC, Cipla, NTPC, Siemens and Hindalco were the top gainers.

Outside the frontline indices, the big losers in the broader market were Ashok Leyland, Bajaj Finserve, GVK Power and Educomp. On the other hand, gainers included Marico, Engineers India, Aban Off and Nestle India.