Sensex hits 10-month low on political woes

Bangalore: Indian shares fell below 14,000 points for the first time in 10 months on Tuesday as political uncertainty and expectations for an interest rate increase kept investors on the edge.

The top-30 BSE index dropped as low as 13,991.31, the lowest since August 22, 2007, before pulling back to close down 1.31 per cent at 14,106.58. Twenty-three of its components closed in the red.

It had risen nearly one per cent early on short-covering ahead of the expiry of monthly derivatives contracts on Thursday, but lost steam and stretched losses to 10 per cent over five sessions.

"Lot of negative news is coming in on the political as well as economic front and retail investors are not willing to hold on to their positions in the market," said Ashok Jainani, vice-president of research at Khandwala Securities.

Investors were wary ahead of a meeting between India's coalition government and its communist allies scheduled today to thrash out a compromise over a nuclear deal with the US.

The left parties have said they would withdraw crucial parliamentary support to the minority ruling coalition if the government went ahead with the energy pact.

Infosys Technologies fell nearly three per cent to Rs1,793 on concerns about the economic health of the US, which contributes more than half of the company's revenue.

Reliance Industries rose 2.2 per cent to Rs2,066.20, after tumbling more than 13 per cent in the past four days to a nine-month closing low.

In the broader market, losers led gainers three-to-one on volume of 256 million shares.

The broader 50-share NSE index fell 1.76 per cent to 4,191.10.