Markets end weak; Sensex slips 264 points

After a weak opening this morning (the Sensex opened at 18,262 down 122 points), the bourses continued their downward movement.

However, in the last trading session, the Sensex recovered 206 points to close at 18,265, but it still remained 264 points off the previous day's close and ended at 18,222.

The Nifty, at 5,463, ended down 1.3%, or 76 points.

Post-noon, the BSE benchmark dipped to its intra-day low of 18,059, as domestic political fears, and unabated tension in Libya dampened market sentiment.

With an impending civil war in largets oil-producing African nation threatening to cut off oil supply to a significant degree, crude prices touched 2.5 year highs, thus prompting negative market sentiment due to a spike in commodity prices, and subsequently inflation.

The crisis in Libya has assumed such serios proportions that the US is contemplating tapping its own oil reserves in the face of scorching crude prices, which spiked above $106 a barrel, prompting US crude oil futures to jump 1.6%, their highest ever since 2008.

Jim Rogers, an investment expert, averred crude prices were rising due to supply

constraints. He added, "Crude will continue to go higher, though there can be intermittent corrections. However, the price of oil is going to continue to rise for years to come."

At home, the pull-out of the DMK, the Congress ruling party's primary ally, from the UPA 2 coaliton, saw investor sentiment weaken on fears the propsals put forth for the infratstructure sector in the recently announced Union Budget may not see fruition.

Also, the Banking Regulation Amendment Bill, approved by the Centre on March 3, which would see the issue of new banking licences, is also in jeopardy because of the DMK's withdrawal.

Selling pressure was witnessed across the board, with the broader markets, and the sectoral indices closing in the red.

However, at the end of the day, gainers on the Sensex were Wipro at Rs 446 and Tata Power at Rs 1,230, both up by a per cent each, and Cipla at Rs 305 up marginally by 0.4%.

Losers on the index were led by auto stocks Maruti Suzuki and Tata Motors at Rs 1,265 and Rs 1,127 down 4% each, and Reliance Communications at Rs 90 down 3%.