The Sensex finally ended (provisional) with a loss of 254 points at 18,232. The NSE Nifty shed 73 points at 5466.
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(Updated at 1140 hrs)
After a weak opening this morning (the Sensex opened at 18,262 down 122 points), the bourses continued their downward movement. However, in late afternoon trades, the Sensex recovered 174 points at 18,188 down 298 points from the previous day's close, while the Nifty, at 5,461, was down 78 points.
Post-noon, the BSE benchmark dipped to its intra-day low of 18,059, as domestic political fears, and unabated tension in Libya dampened market sentiment.
With an impending civil war in largets oil-producing African nation threatening to cut off oil supply to a significant degree, crude prices touched 2.5 year highs, thus prompting negative market sentiment due to a spike in commodity prices and inflation.
The crisis in Libya has assumed such serios proportions that the US is contemplating tapping its own oil reserves in the face of scorching crude prices, which spiked above $106 a barrel, their highest ever since 2008.
Jim Rogers, an investment expert, averred crude prices were rising due to supply constraints. He added, "Crude will continue to go higher, though there can be intermittent corrections. However, the price of oil is going to continue to rise for years to come."
At home, the pull-out of the DMK, the Congress ruling party's primary ally, from the UPA 2 coaliton, saw investor sentiment weaken on fears the propsals put forth for the infratstructure sector in the recently announced Union Budget may not see fruition.
Also, the Banking Regulation Amendment Bill, approved by the Centre on March 3, which would see the issue of new banking licences, is also in jeopardy because of the DMK's withdrawal.
Gainers on the Sensex were Tata Power at Rs 1,234, Cipla at Rs 306 and Wipro at Rs 44 all up 1%. Losers on the index were Tata Motors at Rs 1,134, Relaince Communications at Rs 90 and L&T at Rs 1,563 all down 3%.
The broader markets under-performed the benchmark, as the BSE Mid-cap index declined 1.4% at 6,499, and the Small-cap, at 7,875, was down 1.5%.
All the sectoral indices on the BSE were in negative territory, with the Capital Goods index losing 2.3% at 12,653, the Auto index at 8,733 and Realty at 2,035 both down 2%.
Capital Goods stocks fell on the uncertainty regarding the implementation of the proposals chalked out for the infrastructure sector, which included the creation of infra debt funds to finance large-scale infra projects. Top losers on the Capital Goods index were Punj Lloyd at Rs 62 down 4%, Areva T&D at Rs 258 and Gammon India at Rs 119 both down 3%.
Amongst the auto stocks, Ashok Leyland was the major laggard at Rs 51 down 5%, Bharat Forge at Rs 323 and Tata Motors at Rs 1,134 both down 3%.
Orbit corp at Rs 49, Indiabulls Real Estate at Rs 108 and Peninsula Land at Rs 60, all down 3%, were the top losers in the realty space.
FMCG stocks were flat, albeit with a negative bias, at 3,502, followed by the IT index at 6,191 and the Healthcare index at 5,839 both down nearly a per cent.
Commenting on the current market scenario, technical analyst Devangshu Datta said, "The market is obviously quite bearish, with support (for the Nifty) at 5,400, and resistance at 5,460."
The market breadth was quite negative with 1,991 stocks declining as against an advance of 836 stocks.
