Mumbai: The Bombay Stock Exchange benchmark Sensex on Monday slumped by about 264 points as fresh political concerns at New Delhi and fears of another hike in interest rates amid soaring crude prices triggered intense selling, particularly in the auto sector.

The 30-share index closed at 18,222.67 points, down by 263.78 points, or 1.43 per cent. During the day, the barometer fell by a hectic 428 points.

All the sectoral indices lost between 0.19 per cent and 2.55 per cent.

The National Stock Exchange's 50-share Nifty tumbled by 75.60 points, or 1.36 per cent, to 5,463.15 points.

Brokers said investors resorted to selling as the Dravida Munnettra Kazhagam, a key ally of the Congress-led UPA government, said that it was pulling out of the government, which raised fresh political concerns.

"After cheering the Budget, the Indian market resumed their southbound journey amid fresh trouble for the UPA II regime," IIFL Head of Research (India Private Clients) Amar Ambani said.

Analysts said investors also feared another hike in key rates by the RBI in its next policy meeting on March 17. Interest rate sensitive auto, realty and banking stocks were battered.

"Sentiment was also hit by a fresh spike in crude oil amid continued violence in Libya and other parts of the Middle East," Ambani said.

Global crude oil, which crossed USD 106 a barrel mark to about 29-month high also worried market participants as they expected another round of rise in oil prices by the government, which could stoke inflation.

The BSE Auto index fell the most among sectoral indices losing 2.55 per cent. The country's largest car maker, Maruti Suzuki, dropped by 3.73 per cent while homegrown auto major Tata Motors fell by 3.64 per cent.

The BSE Capital Goods index dipped by 2.36 per cent after heavyweights power equipment maker BHEL and engineering giant Larsen& Toubro declined. BHEL lost 3.21 per cent and Larsen & Toubro  dropped by 2.69 per cent.

The BSE-Realty fell by 1.66 per cent, the Bankex by 1.60 per cent, the BSE-Metal by 1.43 per cent and the BSE-CD by 1.35 per cent.

Among the Sensex stocks, SBI fell by by 2.87 per cent, Tata Steel by 2.39 per cent, HDFC by 2.36 per cent, M&M by 2.36 per cent, TCS by 2.27 per cent and Jindal Steel by 2.03
percent.

Realty major DLF dipped by 1.91 per cent, Jaipra Asso by 2.02 per cent, HUL by 1.88 per cent, REL Infra by 1.88 per cent, HDFC Bank by 1.85 per cent, ONGC by 1.75 per cent and RIL 0.57 per cent.

The total market breadth remained negative with 1,972 stocks closing with losses against 908 that finishing with gains on the BSE. The total market turnover was sharply low at Rs 2,442.57 crore from Rs 3,165.97 last Friday.

On the global front, Asian stocks ended mixed with downward bias on sharp rise in crude oil prices. Key Indices from China and Singapore closed with gains while from Hong Kong, Japan, South Korea and Taiwan finished with losses.

European markets were trading just in positive terrain in their afternoon deals.

Foreign Institutional Investors (FIIs) pumped in Rs 1,373.5 crore in last three trading sessions since March 1.

(Agencies)