Sensex sniffs at 18,000 level but politics plays spoilsport

After a promising start tracking firm global cues, the BSE benchmark index climbed to 17,972.54, its highest intra-day peak in 23 weeks, on buying in IT, bank and FMCG stocks.

The Sensex, however, started losing momentum amid the standoff between Opposition and the government over CAG reports, including on coal block allocation, continuing into the third day. The index closed at 17,850.22, up 3.36 points over yesterday.

"...The Centre will find it hard to push through important bills given the Opposition onslaught in and outside Parliament. While BJP has gone on the offensive over the controversial CAG reports, TMC leader Mamata Banerjee has yet again stalled discussion on FDI in multi-brand retail and aviation," said Amar Ambani, Head of Research, IIFL.

Brokers said investors and funds booked profits in the second half of the session amid worries that pace of economic reforms could be stalled with the BJP-led NDA sticking to its demand for Prime Minister Manmohan Singh's resignation on the coal block allocation issue.

Among the 30-share Sensex, gains in Infosys, TCS, ITC and HUL were offset by losses in RIL, L&T, HDFC, ONGC and M&M.

Similarly, the NSE Nifty ended higher by a meagre 2.50 points to 5,415.35, after touching high of 5,448.60.

Fund flows into stocks were tepid after normal operations in public sector banks were today hampered for the second day because of the strike called by unions to protest against reforms in the sector and outsourcing of non-core services.

Traders said trigger for selling commenced after mid-session on European stocks trimming initial gains after manufacturing data from the Eurozone showed the region contracted for the seventh month in a row. (MORE)