Stock markets plummet after DMK’s pull-out threat
19 Mar 2013
The Bombay Stock Exchange's key indicator, the 30-share Sensex, shed a largish 350 points on today after M Karunanidhi's Dravida Munnetra Kazhagam party announced that it was withdrawing from the United Progressive Alliance government.
The National Stock Exchange's 50- NSE Nifty slipped over 100 points and traded below the key 5750 mark.
The rupee slipped to 54.33 a dollar while 10-year bond yields rose as much as seven basis points to 7.92 per cent.
The political uncertainty came on the same day that the Reserve Bank of India cut a key interest rate by 0.25 per cent, while warning that further monetary easing was limited (See: RBI eases repo by 0.25 %; warns further cuts unlikely soon).
A compromise with the DMK is more than likely, as finance minister P Chidambaram said the government is stable and will continue to maintain its majority in the House.