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Indian stocks plunge on political concerns; Sensex falls 438 points

US markets closed firm overnight while most Asian markets settled firm yesterday. Most of the European indices were also trading higher after an initial fall.

The BSE 30-share Sensex lost 438.44 points or 3.04 per cent at 13,989.11. It had opened higher at 14,512.19 and advanced further to hit a high of 14,534.51. However it started declining from here on intense selling to touch a low of 13,941.93 as selling continued. At the day's low, the Sensex had lost 485.62 points for the day. It oscillated 592.58 points for the day.

The benchmark index BSE Sensex has lost 1879.74 points or 13.43 per cent from its all time high of 15,868.85, struck on 24 July 2007.

On Monday, Left parties asserted that a freeze on the forthcoming negotiations on India-specific safeguards at the International Atomic Energy Agency (IAEA) was a prerequisite for accepting the governmentís suggestion of setting up a panel to look into Left's concerns over the Indo-US nuclear deal. Left parties had warned the government on Saturday, of serious consequences if it pursues with a nuclear deal with the United States. The four Communist parties have 60 members of parliament (MPs) in the 545-member lower house of parliament. Prime Minister Manmohan Singh's government could fall or be reduced to a minority if the Left withdraws support. Banking stocks tumbled on concerns of sub-prime lending in US. State Bank of India plunged 5.50 per cent to Rs1465.30 on 8.05 lakh shares. it was the top loser from the Sensex pack.

HDFC Bank (down 1.80 per cent to Rs 1105) and ICICI Bank (down 4.20 per cent to Rs835.45) also slipped Reliance Energy (down 5.16 per cent to Rs 688) and Mahindra & Mahindra (down 4.66 per cent to Rs 612), and were the other key losers from Sensex pack.

Reliance Communication lost 4.22 per cent to Rs486.50 after denying recent reports it was in talks with Malaysia's Maxis Communications to buy a controlling stake in its Indian unit Aircel Cellular. India's second largest cellular services provider Reliance Communications slipped 2.44per cent to Rs495.55. It added 14.6 lakh mobile customers in July 2007 taking its total subscriber base to about 3.7 crore. It had gained 14.5 lakh users in June 2007.

India's top cellular services provider Bharti Airtel slipped 0.65per cent to Rs 821.70. The company plans to double the number of wireless towers to 80,000 by the end of March 2008. Bhel, the country's largest power equipment maker, declined 0.66 per cent to Rs 1599.80. It had hit a high of Rs 1648 on securing order worth Rs6500 crore to set up two power projects of 1,000 megawatts each. Reliance Industries, the country's biggest private sector entity by net profit and oil refiner, slipped 2.77 per cent to Rs 1742.10 on 10.65 lakh shares. As per reports, the company has made an oil discovery in the Krishna basin while drilling the third well. The discovery is estimated at around 20 meters of thickness, making it possibly one of the largest oil discoveries on Indiaís east coast.

IT stocks came under pressure on concerns that they may face tougher market conditions if the US credit woes squeeze IT spending.Wipro (down 4.94 per cent to Rs446.30), Satyam Computer Services (down 4.03 per cent to Rs 415.05), and Infosys Technologies (down 3.76 per cent to Rs 1760.15) slipped.