Sensex and Nifty tumbled due to geopolitical concerns and SEBI's updated rules on F&O trading.
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Summary: There was widespread selling pressure as all 13 of the National Stock Exchange's sector indices saw negative trade, with the Nifty Auto index falling by 2%.
The Securities and Exchange Board of India (SEBI), the market regulator, published new regulations for futures and options trading on Thursday to reduce speculative trading, which caused the Indian equity benchmarks to plummet sharply.
The sour attitude on Dalal Street was further worsened, analysts said, by the rising tensions in the Middle East following Iran's attack on Israel with over 200 missiles. The Nifty 50 index hit an intraday low of 25,452, and the Sensex dropped as much as 1,264 points.
The Sensex fell 766 points to 83,500 at 9:16 am, while the Nifty was down 267 points at 25,530.
SEBI has raised the minimum contract size for index derivatives from Rs 5-10 lakh to a minimum of Rs 15-20 lakh. As the regulator pointed out, this will replace market expansion and investor safety in the hazardous environment.
SEBI intervened after research revealed that over one crore participants, or 93% of retail traders, suffered losses in the F&O category. Between FY22 and FY24, the losses were beyond 1.8 lakh, with an average loss of Rs 2 lakh.
Most Asian markets were trading higher, with the Nikkei in Japan climbing 2.31 percent, the Straits Times in Singapore up 0.14 percent and Taiwan Weighted rising 0.75 percent. Due to a holiday, China's stock exchanges are closed this week.
In the domestic market, there was widespread selling pressure as all 13 sector gauges reported by the National Stock Exchange saw lower trade, with the Nifty Auto index falling by 2%. The Nifty IT, FMCG, PSU Bank, Oil & Gas, Realty, Healthcare, and Realty indices all had declines of more than 1%.
The Nifty Midcap 100 index dropped 1.13 percent, while the Nifty Smallcap 100 index dropped 1.28 percent, indicating that selling pressure was also present on mid- and small-cap equities.
Bharat Petroleum, whose stock dropped 3.14 percent to Rs 356, is the biggest loser. Eicher Motors, Asian Paints, Mahindra & Mahindra, Wipro, Tata Motors, Tata Consumer Products, Bajaj Auto, Maruti Suzuki, and Bharat Electronics, are also among the companies that saw declines.
The notable gainers were JSW Steel, Britannia, and ONGC. With 2,221 shares falling and 817 shares rising on the BSE, the overall market breadth was very negative.
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