Traders have cut exposure in blue-chip stocks ahead of the crucial censure vote in Parliament on Tuesday over the Gujarat government's handling of the communal riots in the state. Market sentiments were also affected after Reliance group officials were arrested for possessing government documents.
Reflecting these bearish sentiments, the benchmark index, BSE Sensitive Index (Sensex) settled with a loss of 70.49 points at 3,301.21, off from intraday low of 3,296.88 points -- its lowest close since January 30. On the National Stock Exchange (NSE), the S&P CNX Nifty Index also shed 23.20 points and closed at 1,074.20.
Brokers said, "Investors are waiting for the political uncertainty to get out of the way, before picking fresh positions." Moreover, the credit policy, which left interest rates unchanged and promised to provide funds to sustain an expected economic recovery, had little impact on the market.
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Both Reliance group companies, Reliance Industries (down 4.73 per cent to Rs 274.80) and Reliance Petroleum (down 3.33 per cent to Rs 24.70), reeled under selling pressure on reports that two top Reliance group officials have been remanded to judicial custody for the possession of government documents.
Most of the banking stocks witnessed lacklusture movement as the Reserve Bank of India's credit policy left the interest rates on savings deposits unchanged at 4 per cent. State Bank of India declined by 4.39 per cent to Rs 226.25, after touching an intraday high of 240.50.
Among other key stocks, Hindustan Lever Ltd (down 1.86 per cent to Rs 203.30) and ITC (down 1.96 per cent to Rs 607) also remained weak on lack of fresh inflows.
However, select PSU stocks buck the weak trend. IPCL (up 3.94 per cent to Rs 105.60) ended with modest gains after touching 52-week high of Rs 109.80 in early trades, on reports that the three short-listed players have submitted their financial bids. Other key stocks such as Hindustan Petroleum Corporation Ltd (up 3.66 per cent to Rs 273) and MTNL (up 2.13 per cent to Rs 139.20) ended with gains.
Meanwhile, technology stocks continued remain subdued on sustained fall on tech-heavy Nasdaq on Friday. Infosys Technologies (down 4.64 per cent to Rs 3,636) and Satyam Computer (down 1.96 per cent to Rs 255.05) slipped further on sustained selling pressure, after warnings from VeriSign and JDS Uniphase pulled down the Nasdaq to its six-month low of 1,663.89 on Friday. But Rolta India (up 12.95 per cent to Rs 140) bucked the trend on sustained bargain hunting, ahead of the announcement of its results.