Jitter continues on Dalal Street; rate sensitive tanks

Jittery continued on the Dalal Street at 14:03 hours after the talks between UPA allies Dravida Munnettra Kazhagam's (DMK) and Congress failed in last weekend over seat-sharing in forthcoming Tamil Nadu's election. DMK leader T R Balu said its party's six ministers would submit their resignations on Monday.

Crude oil was another worrying factor factor for global markets due to geopolitical tensions in Middle East and North Africa. Political tensions in Libya were not over yet. London brent crude was trading at USD 116.82 a barrel, up 0.73% and the NYMEX crude was at USD 106 a barrel, up 1.5%. "The newsflow from West Asia remains a risk as does the potential for a further oil and food-led commodity spike. It is not encouraging that the dollar has failed to rally on its usual safe haven status despite geopolitical tremors. The risk remains that there is a growing potential for quantitative easing to backfire on the Fed chairman if oil price spikes further," says Chris Wood of CLSA. DMK said congress demand for 63 seats showed they don't want alliance. "So we are pulling out of centre as don't want to stay in cabinet." Party's six ministers like Dayanidhi Maran (textile minister), A Azaghiri (fertiliser minister), D Napolean (MoS, Social Justice), S Jagathrakshakan (MoS, Information & Broadcasting) etc are likely to resign today. DMK has 18 seats in the Lok Sabha. But experts believe that moving out by DMK party leaders from cabinet will not see major impact on UPA government while rise in crude oil prices will create panic in markets. The 30-share BSE Sensex tanked 323 points to 18,163 and the 50-share NSE Nifty dropped 99 points to 5,439. European markets too were under pressure with 0.2-0.5% fall in opening trade. Rate sensitives took huge beating on exchanges - Realty, Capital Goods, Bank and Auto indices tumbled 2-2.5%. Metal, Power, IT, Healthcare and Oil & Gas indices were down 1-1.7%. Largecaps like TCS, ONGC, SBI, BHEL, Tata Motors, L&T, HDFC, HDFC Bank, Axis Bank, JSPL, HUL, Sun Pharma, Tata Steel and SAIL tanked 2-4%. ICICI Bank and Bharti Airtel were down over 1.5%. However, Reliance Industries was showing some recovery with slower pace. In midcap space, Trent, OnMobile Global, KGN Industries, Coromandel International and Info Edge rallied 3.5-9% while India Infoline, Tecpro Systems, GVK Power, SpiceJet and Cholamandalam lost 5.5-9%. In smallcap space, Walchandnagar, Emami Paper, Insecticides India, Lloyds Metals and Symphony jumped 5-14% whereas REI Six Ten, Zodiac Clothing, Sarda Energy, KPR Mill and Hindustan Media fell 4-6%. _PAGEBREAK_ Nifty drops 100 points; all sectoral indices dip Nervousness in equity benchmarks was evident today as the political tug-of-war between UPA allies DMK and Congress took an unexpected turn. Coupled with the political uncertainty rise in crude oil prices weighed in on sentiment across the globe. The Nifty shed over 100 points gained in last week's rally. The sell-off was seen across sectors - the realty, capital goods, auto, bank and metal were beaten the most and respective indices were down 2-3%. Power, Oil & Gas, FMCG, Healthcare and IT indices tanked 1-1.5%. The Dravida Munnettra Kazhagam (DMK) pulled out of the United Progressive Alliance (UPA) in the last weekend after seat-sharing talks for the Tamil Nadu elections failed, reported CNBC-TV18 quoting sources. The news came in when the congress government clearing the dust of scams like 2G spectrum etc. Congress demand for 63 seats in Tamil Nadu, which shows that they don't want alliance, says DMK. Party's ministers are also likely to resign today from their Lok Sabha seats - Currently Dayanidhi Maran is textile minister, A Azaghiri is fertiliser minister, D Napolean is MoS, Social Justice and S Jagathrakshakan is MoS, Information & Broadcasting. DMK has 18 seats in the Lok Sabha. "The DMK's withdrawal is a negative but not a very big one. While investors don't like the uncertainty, they know that the government is not in danger," said Gajendra Nagpal, CEO of Unicon Financial. "The unrest in the Middle East and rising oil prices are a bigger threat right now." Crude oil was hovering around the USD 106-107 a barrel on the NYMEX and London brent crude was trading above the USD 117 a barrel. The 30-share BSE Sensex plunged 335 points to 18,150 and the 50-share NSE Nifty fell 103 points to 5,436. About five shares declined as against one share advanced on the National Stock Exchange. Singh's Congress-led coalition government is not in danger of collapse because the southern DMK has said it will continue to offer conditional support even after its six ministers quit. Heavyweights like RIL, NTPC, Bharti Airtel, ICICI Bank and ONGC fell 1.2-2%. SBI, TCS, Tata Motors, L&T, BHEL, HDFC Bank, HDFC, HUL and Tata Steel were down 2.5-4%. However, only five stocks like Cairn, Reliance Power, Dr Reddy's Labs, Siemens and Cipla were gainers. In midcap space, Trent rallied 11%. KGN Industries, Coromandel International, OnMobile Global and Shiv Vani Oil gained 4-5%. However, India Infoline, Cholamandalam, Cox & Kings, Dewan Housing and GVK Power lost 5-7%. In smallcap space, Insecticides India shot up 9% as company bought Nocil's Brand Monocil. Bhansali Engg, Symphony, India Securities and Ontrack Systems went up 5-8.5%. However, Zodiac Clothing, REI Six Ten, KRBL, Bengal & Assam and Surana Inds fell 6-7%. (With inputs from Reuters) _PAGEBREAK_ Sensex sheds about 300 points on DMK-UPA likely fallout The benchmark Nifty shed nearly 100 points in morning trade today at 10:30 hours as alliance between United Progressive Alliance (UPA) and DMK party is likely to be broken on seat-sharing issue in Tamil Nadu election. The Sensex shed nearly 300 points as breadth worsened. The DMK pulled out of the United Progressive Alliance (UPA) after seat-sharing talks for the Tamil Nadu elections broke down, reported CNBC-TV18 quoting sources. Congress demand for 63 seats showed they don't want alliance, says DMK (Dravida Munnettra Kazhagam). Party's ministers are also likely to resign from their Lok Sabha seats - Currently Dayanidhi Maran is textile minister, A Azaghiri is fertiliser minister, D Napolean is MoS, Social Justice and S Jagathrakshakan is MoS, Information & Broadcasting. DMK has 18 seats in the Lok Sabha. Political analyst Yogendra Yadav said that the UPA will fall short of majority if DMK withdraws support. "Anti-UPA is not in majority even if DMK withdraws support," he said. Rising crude oil prices in international markets due to Libya concerns too weighed on the markets, which will have some impact on companies' earnings. Crude oil was trading above the USD 105 a barrel on the NYMEX and London brent crude was above the USD 117 a barrel. Only one share Cairn India was in the green on Nifty. All sectoral indices were in red - the BSE Auto, Realty, Bank, Metal, Capital Goods, Power, Oil & Gas, FMCG and Healthcare indices fell 1-2.5%. The 30-share BSE Sensex tanked 284 points to 18,202 and the 50-share NSE Nifty slipped 89 points to 5,450. The broader indices too tumbled over 1.5%. In the F&O space, Nifty Puts ranging from 5000 to 5600 strike prices barring 5200 Put saw huge cut in open interest, clearly suggesting put writers are covering their positions after writing puts last week. Nifty 5500 & 5600 Calls saw addition in open interest on back of call writing. Nifty 5000 Put was trading at Rs 29 indicating Nifty may fall even further in coming days. Another bearish indicator for market was India VIX trading at 25.64, up 11%. Among frontliners, Tata Motors, Maruti Suzuki, M&M, Reliance Communications, Jindal Steel, Sun Pharma and Axis Bank were top losers with 3-4% fall. In midcap space, Trent, OnMobile Global, Shiv Vani Oil, Essar Shipping and Hotel Leela were up 3-4% while India Infoline, Peninsula Land, Cholamandalam, Bajaj Corp and Dewan Housing fell 5-7%. In smallcap space, Bhansali Engg, Insecticides India, India Securities, Graviss Hosp and Ontrack Systems gained 5-9% whereas REI Six Ten, Kirl Electric, Surana Inds, EIH Associated Hotel and Prime Securities kist 6-9%. Nifty plunges below 5500 on political instability Political instability due to pull out by DMK party from the ruling coalition dragged the benchmark Nifty below the 5500 level and the Sensex hammered by 250 points. NYMEX crude oil prices above the USD 105 a barrel too added more pressure on the markets. London Brent crude was trading above the USD 117 a barrel. The Dravida Munnettra Kazhagam (DMK) pulled out of the United Progressive Alliance (UPA) after seat-sharing talks for the Tamil Nadu elections broke down. Congress' demand for 63 seats shows they don't want alliance, says DMK, which has 18 seats in the Lok Sabha. Political analyst Yogendra Yadav said that the UPA will fall short of majority if DMK withdraws support. "Anti-UPA is not in majority even if DMK withdraws support," he said. According to him, the UPA-DMK alliance cannot be assumed to have broken down as DMK will provide issue-based support to UPA and it is unlikely that UPA will rush into alliance with Samajwadi Party (SP). Among frontliners, BPCL, M&M, Axis Bank, ICICI Bank, SBI, Jaiprakash Associates, Suzlon, L&T, Reliance Power and Reliance Industries and ONGC were under selling pressure. However, Cairn and PNB were gainers in early trade. At 9:17 hours IST, the 50-share NSE Nifty tanked 62 points to 5,477 and the 30-share BSE Sensex fell 181 points, to trade at 18,305. Breadth was in favour of declines - about 143 shares advanced as against 640 shares declined on National Stock Exchange. The CNX Midcap slipped 85 points or 1.2% to 7,568. Midcap & Smallcap space: IVRCL Infra and GVK Infra slipped 2.5% each. Punj Lloyd tanked 5%. DB Realty was down 1%. The company accepted resignation of MD Shahid Balwa and director C Bhattacharya. Oil marketing and aviation companies were down on rising oil prices. IOC, Jet Airways and Kingfisher plummeted 2-4%. Sun TV tumbled 5%. Essar Shipping was up 4% and Hotel Leela up 4% Global cues: The US markets managed to recover from day's low in last half an hour of trade on encouraging jobs report and spiralling crude oil above USD 105 a barrel - a new two-year highs. The Dow Jones Industrial Average ended down 88 points or 0.72% at 12,170, after seeing recovery of 91 points from day's low of 12,079 on Friday. It was up 0.33% for week and up 5.1% YTD. The Nasdaq Composite was down 14 points or 0.5% at 2,785, after seeing recovery of 17 points from day's low of 2,768; it was up 0.13% for week and up 5% YTD. The S&P 500 Index fell 10 points or 0.74% at 1,321, after recovery of 9 points from day's low of 1312; it was up 0.10% for week and up 5% YTD. Asian markets opened down; Nikkei was down 1.5%, Taiwan down 0.86%, Hang Seng down 0.67%, Kospi down 0.55% and Straits Times down 0.11%. Commodities CRB Index was up 0.6%; gained for its sixth straight Crude Oil gained 2.5% at USD 104.6/bbl, new 2-year high; gained 6.7% for week Natural gas went up 0.7% at USD 3.81/ounce on Friday; was up 5% for week Gold ended up 1% at USD 1431/ounce, climbed to new record high Silver prices set new 30-year high. It was up 2.6% at USD 35.41 per ounce Cotton futures climbed to a new record high; limit up to almost USD 2.13 per pound