Sensex slips 274 pts, poll results eyed

The 30-share BSE index closed at 17,362.87, its lowest level since February 1, with 25 of its components closing in the red

The BSE Sensex logged its lowest closing level in more than a month today, on worries that a lower-than-expected showing by the Congress party in the Uttar Pradesh elections could hamper any move by the United Progressive Alliance (UPA) government to revive stalled reforms.

Financials and software stocks, which had gained in the market run-up so far this year, mainly contributed to the decline, while Tata Motors bucked the trend on news of unit Jaguar Land Rover's likely joint venture in China.

The main 30-share BSE index closed down 274.12 points or 1.55 per cent at 17,362.87, its lowest level since February 1, with 25 of its components closing in the red.

"There is jitteriness ahead of poll results. After the rally in January and February, there is some profit taking, and fresh buying is not happening," said

K K Mital, chief executive for portfolio management services at Globe Capital.

"Once the poll scenario is clear, some buying may return."

Election results for five states are due on Tuesday but voter surveys released after the phased, month-long poll ended on Saturday indicated that Rahul Gandhi failed to deliver the election comeback he had promised for the Congress in Uttar Pradesh.

Banking shares slipped on ebbing hopes of an interest rate cut in the Reserve Bank of India's (RBI) policy review on March 15, as analysts expect rising crude prices could force the central bank to hold rates on fears inflation may creep up again. A cut in interest rates would help boost credit demand for banks.

State Bank of India, the country's largest lender, fell 3.3 per cent. ICICI Bank shed 3.8 per cent while HDFC Bank closed 1.6 per cent lower.

The RBI remains focused on economic growth even though rising oil prices have emerged as an inflationary risk since the central bank's last policy review in January, deputy governor Subir Gokarn said.

Shares in software exporters, which count the US and Europe among major markets, slipped after fresh concerns about the global economic health caused by a slowing Chinese economy and Greece's continuing debt crisis. Tata Consultancy Services lost 0.9 per cent, Infosys fell 1.7 per cent, while the CNXIT index closed 1.2 per cent lower.

Tata Motors rose 2.3 per cent after sources told Reuters its luxury Jaguar Land Rover unit is seeking regulatory approvals for a manufacturing joint venture with China's Chery Automobile Co, giving it a stronger foothold in the world's largest auto market.

Oil and Natural Gas Corp closed 0.9 per cent higher, reversing earlier losses, after it said state-run Life Insurance Corp raised its holding in the company to 9.5 per cent.

The 50-share NSE index closed down 1.5 per cent at 5,280.35.

Stocks that moved
Raymond rose 3 per cent to Rs 360.95 after the a newspaper reported that the private equity arm of luxury product group LVMH is in talks to invest $150 million in the Indian apparel-maker's unit. In a statement to stock exchanges, Raymond said there was no such proposal.

JSW Steel, the country’s No. 2 steelmaker by capacity, fell 3.8 per cent to Rs 757.20 on worries over its operations after the company said the quality of iron ore offered in e-auctions is deteriorating substantially.