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NEW DELHI: Flagship indices Nifty and Sensex closed with losses on Thursday as the spectre of the no-confidence motion against the Modi government loomed large.
Heavyweights such as Kotak Mahindra Bank and Larsen Toubro turned shaky.
Investors decided to keep their powder dry in the run-up to the no-trust motion.
On Wednesday, a number of opposition parties joined hands and put the government on notice.
The Lok Sabha Speaker fixed Friday for the debate and a vote thereafter.
The political development has soured the market mood even though the government has the numbers on its side.
The BJP alone has a simple majority of 273 in the Lok Sabha and 312 along with NDA allies.
The global scenario looked lacklustre as the tariff dispute between the US and China remained a big overhang.
Asian stocks developed cold feet.
China's stock and currency markets nosed down.
For the second consecutive session, the Sensex fell, this time 22 points, or 0.06 per cent, ending at 36,351.
The BSE index saw 18 stocks advancing and 13 declining.
The Nifty came down by 23 points, or 0.21 per cent, settling at 10,957.
As many as 21 stocks looked up, but 28 lost and one remained unchanged.
Midcaps and smallcaps left the Sensex behind.
While the BSE Midcap eased 0.63 per cent, the smallcap cracked 1 per cent.
With a loss of nearly 4 per cent, Kotak Mahindra Bank was the top drag on the Sensex.
The bank on Thursday reported lesser-than-expected June quarter earnings.
Shares of Ashok Leyland plunged 4.25 per cent on the BSE after brokerage CLSA downgraded it to 'sell' from 'buy', saying demand outlook is getting clouded and market share has started to slip.
The firm has also cut target price on Ashok Leyland to Rs 100 from Rs 175.
On Wednesday, the government brought in new axle norms for load carrying capacity which experts said could hurt demand for commercial vehicles, including Ashok Leyland.
IT player Mindtree settled nearly 9 per cent down after it posted a drop in net profit sequentially for the quarter to June.
Larsen Toubro, HDFC, TCS and Infosys all pulled down the index.
However, support for the Sensex came in from RIL, ITC, HDFC Bank, YES Bank and Vedanta.
Only BSE Energy, FMCG, consumer durables and oil gas managed to go home with gains.
Global stocks were mostly depressed.
