Mumbai, July 8: Markets today succumbed to the ongoing political situation and weak global markets, snapping its two-day resistance to selling pressure.

The 30-share BSE sensex, which gained over 430 points in the last two sessions, shed more than 476 points at one point of time today. It recovered some of these losses to close at 13349.65, a fall of 176.34 points.

After opening at 13292.80, the index touched the day’s low of 13049.96 on news that the Left had withdrawn support from the UPA government. However, the benchmark index managed to recover these losses on account of short-covering. Broking circles said while news of the Left pulling out was already discounted by investors, the development generated some optimism that more reforms could be on the way. Though international crude oil prices came off today, it is felt that investors will remain nervous till the vote of confidence.

However, the view that the exit of the Left parties will lead to more reforms is not shared by all. “In these years of UPA rule, no significant reforms have occurred. So, how can one expect more reforms now,” an analyst from a foreign brokerage said, adding that the movement of crude oil prices will continue to hold the key to the markets’ direction.

Marketmen said bourses turned bearish in the morning after yesterday’s marginal gain as credit fears resurfaced in global equities. In the Asian market, Hang Seng was down 3.16 per cent, Nikkei by 2.45 per cent, Straits Times 1.62 per cent, Kopsi fell 2.93 per cent and Taiwan by 3.94 per cent. European markets also opened sharply lower on an average of two per cent.

The IT counter bore the maximum brunt with the sectoral index losing 3.11 per cent. Some power stocks gained on expectations that the sector would benefit from the nuclear deal with the US.