Shares in aviation and retail stocks fell sharply after Trinamool Congress, key ally of the Congress-led government, withdrew support in protest against the diesel price hike and opening up the multi-brand retail sector.
The broader markets saw modest cuts, but individual sectors, where the government has unleashed a series of reforms, were the worst affected.
Kingfisher Airlines snapped a five-day winning streak and traded 7.5 per cent lower at Rs 12.46 at 10.15 a.m. SpiceJet shares declined 2.5 per cent at Rs 37.15. However, Jet Airways shares traded with 2 per cent gains at Rs 367.55. The company's management has not been in favour of foreign airlines investing in domestic carriers
Selling pressure was also seen in retail stocks. A large number of political parties and state governments have opposed the government's move to open up the retail sector to foreign investors.
Pantaloon traded 5 per cent lower at Rs 171.30. Tata Group promoted Trent traded 2.3 per cent lower at Rs 1,102.
The support withdrawal will put the fate of the government in the hands of regional parties and put a question over future reforms in sectors like pension and insurance.
(With inputs from Thomson Reuters)
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