Politics plays spoilsport in mkts, Sensex down 147 pts

Resuming trade after a day's break, Sensex fell over 200 points at the outset as UPA ally Trinamool Congress announced withdrawal of support on Tuesday dampening sentiment.

The Sensex staged a brief recovery even as a cross sections of political parties were observing a nation wide band against reform steps. UPA's outside supporter SP's chief Mulayam Singh Yadav's comment that his party will not "tolerate" "anti-people" decisions.

The BSE benchmark index finally ended the day 147 points lower at its one-week low of 18,349.25.

The government had unveiled last week big-bang reforms by opting to hike diesel prices after more than a year and allowing FDI in aviation and retail, that saw Sensex surging by 443 points on September 14.

Global cues also soured domestic market activity after reports that China's manufacturing industry will contract for 11th month. Asian markets closed 1-2 per cent down while Europe was also trading lower in afternoon deals.

The 50-share NSE index dropped by 45.80 points to 5,554.25, after touching a day's low of 5,534.90.

"After weak Chinese data, investors again opted to book profits in the one of the strongest rallies witnessed recently. Political derangement soured sentiments," said Nidhi Sarswat, Senior Research Analyst, Bonanza Portfolio.

A sharp fall in RIL, ICICI Bank and HDFC together contributed over 100 points in Sensex's fall while L&T, SBI, Tata Steel, CIL, BHEL, GAIL and M&M also witnessed selling.

ITC, TCS, Infosys, Bajaj Auto and ONGC, however, notched handsome gains, restricting the fall to some extent.

"IT stocks rose as the bounce back in US dollar rates is helping them rise. TCS, Wipro and Infosys all closed higher," said Nagji K Rita, CMD, Inventure Growth & Securities. (MORE)