Politics hits reform hope,Sensex falls

50-share National Stock Exchange index Nifty fell by 37.60 points or 0.72 pct to 5,205.10.

Shares fell today on concerns over differences in the UPA coalition with BSE Sensex dropping by 120 points,snapping a three-day upsurge.

Banking,capital goods,realty and power stocks dropped the most also on reports that the Reserve Bank plans to tighten norms for loan restructuring of corporates. Under the impact of slowdown,several companies are knocking the doors of banks seeking recast of their debt burden.

The BSE benchmark index fell by 120.41 points,or 0.70 per cent to 17,158.44. Similarly,the 50-share National Stock Exchange index Nifty fell by 37.60 points to 5,205.10.

Brokers said investors became cautious following differences between the Congress and Agriculture Minister Sharad Pawar-led NCP which has raised questions over functioning of the government and the UPA coalition.

Markets had gained 176 points in the last three days on heightened expectations of speedier reforms after Presidential polls which were concluded yesterday. The sudden political developments,however,made investors jittery,analysts said.

They added that it is only through reforms the market can be revived.

Traders said the mood was further hit after the Reserve Bank Working Group gave recommendations about prudential guidelines on restructuring of advances by banks and financial institutions. Bank stocks including ICICI Bank,HDFC Bank,HDFC and SBI ended lower.

Story continues below this ad

In the 30-share Sensex,24 stocks led by Dr Reddy8217;s,BHEL,Sterlite and Hero MotoCorp fell while six scrips,including Bajaj Auto and TCS closed higher.

Maruti Suzuki,which tanked 9 per cent yesterday,held on to slim gains today even as the Manesar plant remained shut following violent incident on Wednesday.

However,Reliance Industries fell by nearly 0.9 per cent ahead of expectations of weak quarterly earnings later today while tech major Infosys slid by 1.13 per cent after gaining yesterday.

Stocks More on Reliance Industries

Company INFO More on Dr Reddy8217;s Lab

Dealers said a mixed trend in global markets offered no support to Indian market as Asian stocks ended narrowly mixed while European markets too offered no major direction in their afternoon deals.

Story continues below this ad

In Asia,key indices from China,Japan,Singapore finished lower while those from Hong Kong and Taiwan closed higher.

Among European indices,France8217;s CAC was trading down by 0.77 per cent,Germany8217;s DAX lost 0.34 per cent while the UK8217;s FTSE was lower by 0.52 per cent.

Back home,major losers from the Sensex pack included Dr Reddy8217;s Lab that fell by 2.68 per cent,followed by BHEL 2.47 pc,Cipla 1.67 pc,ICICI Bank 1.58 pc,Wipro 1.47 pc,HDFC 1.38 pc,Lamp;T 1.22 pc,Tata Power 1.14 pc,Infosys 1.13 pc,SBI 1.08 pc and HDFC Bank 1.04 pc.

However,Bajaj Auto shot up by 2.67 per cent,followed by Maruti Suzuki 2.43 pc and TCS 1.86 pc.

Story continues below this ad

8220;FII flows have stayed positive this month on hope that the UPA will initiate a few key reforms before the start of the monsoon session of parliament on August 8,8221; said Amar Ambani,Head of Research,IIFL.

Among the sectoral indices,the BSE-Bankex fell by 1.28 per cent,the BSE-Capital Goods 1.14 pc,the BSE-Realty 0.99 pc,the BSE-Power 0.95 pc and BSE-Oilamp;Gas 0.71 pc.

The total market breadth turned negative as 1,659 shares finished with losses while 1,165 shares ended with gains.

The total turnover declined further to Rs 1,727.85 crs from Rs 1,926.30 crore yesterday.

Story continues below this ad

Foreign institutional investors FIIs bought shares worth a net Rs 125.78 crore yesterday as per provisional data released by the stock exchanges.

Stocks More on HDFC Bank

Company INFO More on HDFC Bank