Indian markets slump on political worries

Indian stock markets witnessed heavy selling pressure for the second straight day Wednesday due to political uncertainties as the DMK, a key ally of the ruling UPA coalition, pulls out from the government.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened in the positive at 19026.46 points, was trading at 18924.78 points in the afternoon session, down 0.44 percent or 83.32 points from its previous day close at 19008.10 points.

The Sensex slumped to a low of 18871.76 points in the intra-day and touched a high of 19028.09 points. The benchmark Sensex had slumped 285.10 points Tuesday.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) was trading 0.71 percent or 40.85 points down at 5,705.10 points in the late afternoon session. The Nifty had lost 89.30 points Tuesday.

The markets witnessed nervous trading Tuesday after the Dravida Munnetra Kazhagam (DMK), which has 18 members in the Lok Sabha, announced its decision to quit the government over the issue of genocide of Tamils in Sri Lanka.

The Reserve Bank of India's (RBI) cautious stance on monetary policy also dampened sentiments at the markets.

In a mid-quarter review of the monetary policy for the current fiscal the RBI cut its short-term lending and borrowing rates by just 25 basis points and left the reserve ratios that also control money available for auto, home or commercial loans, unchanged. - IANS