BSE Sensex tumbles 285 points after DMK withdraws support to UPA

The BSE Sensex plummeted 285 points to close at a two-week low after the government's key ally DMK withdrew support amid a weak global trend, even as the Reserve Bank of India (RBI) cut repo rate.

Market sentiment battered after a major constituent of the ruling UPA government DMK withdrew its support over the issue of alleged human rights violations of Tamils in Sri Lanka. However, the Congress-led government said there was no threat to its stability.

After a higher start at 19,378.61, the 30-share index of the Bombay Stock Exchange (BSE) dropped below 19,000-level before ending 285.10 points lower at 19,008.10, a level last seen on March 5.

The NSE index Nifty shuttled between 5,863.60 and 5,724.30 before ending lower by 89.30 points to 5,745.95.

Traders said the markets also received a jolt after RBI cut key interest rate by 0.25 per cent but indicated that there is limited room for further monetary easing.

In 30-BSE index components, 24 stocks declined led by BHEL, Reliance Industries, Infosys, Jindal Steel, ONGC, Larsen and Toubro, Mahindra and Mahindra and Hindustan Unilever.

Financial and interest sensitive stocks were major losers and pulled down the benchmark to suffer its biggest single day loss in last three weeks.

The banking index fell 1.97 per cent to 13,209.63.

"The RBI has acted according to the expectation of the market. But still we saw rupee and sensex turning around on the back of hawkish comments made by the RBI," said Abhishek Goenka, Founder & CEO, India Forex Advisors.

The DMK pulling out the support from government spoiled the much created mood on rate cut expectation, he added.

Traders said a weak trend in the Asian region and lower opening in Europe before Cypriot lawmakers meet to discuss a bank-deposit levy also shadowed the region stock markets.

The stock of Bharti Airtel plunged 4.74 per cent to Rs 293.40 after a Delhi court summoned its Chairman Sunil Bharti Mittal in additional spectrum allocation case.

All sectoral indices were down led by realty and capital goods by losing up to 3.63 per cent.

With inputs from PTI