Markets have dropped over 1% in late morning trades with the Sensex plunging below 19,000 amid political uncertainty after the DMK began withdrawing suport to the ruling United Progressive Alliance. According to reports, five DMK ministers seem to have resigned.
At 11:40AM, the Sensex was down 324 points at 18,969 after touching an intra-day low of 18,939 and the Nifty was down 101 points at 5,734 after touching a low of 5,724 so far.
Asian shares recovered from Monday's losses after Cyprus woes weighed on investor sentiment following the tax on bank deposits. The Shanghai Composite was up 0.5%, Hang Seng gained 0.2%, Nikkei was up 1.9% and Straits Times was up 0.8%.
Oil and Gas index was the top loser down 0.8% followed by metal, capital goods, IT, power and Bankex indices. However, healthcare, auto, realty and FMCG indices were marginally up.
In the Sensex pack, HDFC and HDFC Bank were down 2% each on selling pressure. HDFC Bank had rebounded on Monday after the private lender said it has appointed Deloitte Touche Tohmatsu India to conduct an independent forensic enquiry into the allegations made by news website Cobrapost. Among other bank shares, ICICI Bank and SBI were down around 2% each.
Oil and Gas shares were also among the top Sensex losers. Index heavyweight Reliance Industries and ONGC were down 1.5% and 3.9%, respectively.
Other Sensex losers include L&T, Tata Motors, TCS, Bharti Airtel and Hindustan Unilever.
Sun Pharma continues to remain the top Sensex gainer up nearly 1% followed by GAIL, ITC, Infosys and Bajaj Auto.
The BSE Mid-cap and Small-cap indices were down over 1% each. Market breadth was weak with 1,624 declines and 680 advances on the BSE.
