Sensex drops 148 pts on North Korea tension

See-sawing stocks on Wednesday failed to stand up to selling pressure and ended with losses, with the Sensex hitting a one-week low, bogged down by a dogfight between the US and North Korea over the latter's nuclear programme.

The rupee stoked more worries, slumping to a three-week low against the dollar during the day. "A small recovery in late afternoon trade pulled the markets up from its morning trenches and pushed the benchmark Sensex and the Nifty to close only marginally lower. Lack of consensus among the US, Russia and China on how to pressure (North Korea) to abandon nuclear ambitions made investors skittish and wary of risky assets," said Karthikraj Lakshmanan, Senior Fund Manager — Equities, BNP Paribas MF.

At one point, the 30-share Sensex that opened lower touched a low of 31,586.53, but a rally in Reliance Industries and Kotak Mahindra Bank helped the index settle at 31,661.97, a one-week low, down 147.58 points, 0.46 per cent. The index had risen 107 points on Tuesday on bargain buying. The NSE gauge Nifty traded low throughout and cracked below the 9,900-mark, but recovered just in time to close with a loss of 36 points, or 0.36 per cent, at 9,916.20.

Sun Pharma was the hardest hit, plunging 3.73 per cent to Rs 475, followed by ITC 2.43 per cent. Financial stocks Axis Bank, ICICI Bank and State Bank of India were in a pool of red, falling by up to 1.79 per cent, mainly due to profit taking activity. Losses were also reported by Lupin (2.05 per cent), Adani Ports (1.17 per cent) and Tata Motors (1.03 per cent).

Gains in index heavyweight Reliance Industries, however, offset the overall weakness a bit. Kotak Mahindra Bank, Coal India and Maruti Suzuki managed to close positive.

Foreign portfolio investors (FPIs) went back to their selling ways diluting shares worth Rs 379.16 crore on net basis on Tuesday, showed provisional data.