Indian stocks markets crashed today with benchmark Sensex plummeting 839 points amid fresh India-China border tensions. Implementation of the new margin system from September 1 also weighed on the market. After rallying 543 points in the morning session and touching the 40,000-mark, the BSE Sensex surrendered all gains to close at 38,628.29, a loss of 839.02 points or 2.13%. Similarly, the NSE Nifty tanked 260.10 points or 2.23% to end at 11,387.50.
Broader indices such as BSE midcap and BSE smallcap indices crashed 3.8% and 4.4% respectively.
Deepak Jasani, Head of Retail Research, HDFC Securities, said: "Volumes on the NSE were huge aided by the MSCI rebalancing volumes while the short term trend of the markets seems to have turned down."
Sun Pharma was the top loser in the Sensex pack, plunging over 7%, followed by SBI, Bajaj Finserv, Bajaj Finance, NTPC, ICICI Bank, Kotak Bank, M&M and Maruti.
Meanwhile, market sentiment was also weakened after the release of core sector data. The output of eight core infrastructure sectors contracted for the fifth consecutive month, dropping 9.6% in July, mainly due to a decline in production of steel, refinery products and cement. Investors are now awaiting gross domestic production (GDP) data, scheduled to be released later in the day.
"The change in margin system and securities pledge-repledging could undoubtedly bring disruptions in volumes of daily trading as there is insufficient preparation and validation by the participants in this system - viz Exchanges, Depositories, Depository participants, Clearing corp, Brokers and clients," said Deepak Jasani of HDFC Securities.
"We could witness further polarization of stocks in the markets for some time with the top 200-300 stocks seeing the most depth and liquidity. The securities currently pledged with the brokers need to undergo the new process, which so far is not smooth going by the runs conducted so far. Hence large traders are unsure as to whether they will have limits to trade on September 1 which may lead to volume drop in both Cash and F&O segments that may last a few days/weeks," he added.31
PREV CLOSE
Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments, said: "If we break 11300 on a closing basis, the markets might turn negative in the short - medium-term scenario. In order to resume the uptrend, we need to get past 11,600. The next few sessions are going to be a test of discipline, skill and patience. Traders are cautioned not to jump into a trade without weighing the risks associated with the trade. We could see sharp movements." (With Agency Inputs)
No comments:
Post a Comment