Markets erase 1% gains on political jitters.

BSE Building

The S&P BSE Sensex pared intraday gains and slipped below 18,700 as profit booking intensified in capital goods and rate sensitive sectors like auto and banks on concerns of political instability back home. According to dealers, political posturing by Samajwadi Party could have made market participants nervous.

According to reports, Samajwadi Party is giving indications of an early election. It was reported that Samajwadi Party leader and Uttar Pradesh chief minister Akhilesh Yadav on Sunday told a television channel that his party is prepared to withdraw support to the UPA government.

Analysts are of the view that Samajwadi Party’s withdrawal of support would not be a big blow to the Congress-led government as it still has the support of Mayawati-led Bahujan Samaj Party.

The 30-share index closed at 18681.42,down 54.18 points. It touched a high of 18,950.22 and a low of 18,678.87 in trade today.

The Nifty closed at 5633.85, down 17.50 points. It touched a high of 5,718.40 and a low of 5,634 in trade today.

ONGC, HDFC, HDFC Bank, Dr, Reddy’s Labs, DLF & NTPC were some bright spots in an otherwise dull market.

Source : The Economic Times.