The benchmark BSE Sensex slipped 551 points to close below 28,000 mark and the NSE Nifty ended at 8361 on Monday following concerns over stricter norms for participatory notes and slump in Chinese stock market.
The BSE Sensex closed 550.93 points down at 27,561.38. The NSE Nifty ended 160.55 points down at 8,361.00.
The gauge had tumbled by 392.62 points in the previous two sessions on muted earning figures reported by companies and weak global cues.
Finance Minister Arun Jaitley’s statement that the government will not take any “knee-jerk” reaction that will adversely impact country’s investment climate also failed to boost the markets.
Tata Steel, Axis Bank, Hindalco and Tata Motors were among the major losers.
A sharp fall in the Asian markets also contributed the weak markets sentiments. Asian stocks had already started the week on a low note, rattled by a last week’s report on Chinese manufacturing that sparked a sell-off in gold as well as copper and other commodities.
China stocks plunged over 8 per cent on Monday, marking their biggest one-day drop in more than eight years, as a government-triggered rebound petered out amid profit-taking, concerns over economic health and fears of an end to Beijing’s inclination toward looser monetary policies. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 8.6 per cent, to 3,818.73, while the Shanghai Composite Index lost 8.5 per cent, to 3,725.56 point
The traders were cautious over reports on Sebi likely to review participatory notes norms. A government panel on black money has asked Sebi to obtain “beneficial ownership” details for such instruments, as also for monitoring any unusual rise in stock prices, according to media reports.
Sustained selling after disappointing earnings posted by majority of bluechip companies so far and a weak trend at other Asian bourses following weekend sell-off on the US markets also affected the market sentiments.
What experts are saying about the stock markets fall today
Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services Ltd
The rout in Chinese markets impacted markets across Asia, leading the MSCI-EM to a 2-year low. The Chinese Government’s support to the market is wavering, while market forces are making the final decision. In the meantime, concern over P-Note led the Nifty to close below 8500. During these times when the global market is consolidating, India will have the advantage in the long-term especially as the domestic fiscal situation is improving and international commodity prices are supportive.
Alex Mathews, Head Research, Geojit BNP Paribas Financial Services Ltd
The domestic markets on Monday witnessed a sell off as of weak global cues which include weak Chinese markets and concerns of a possible rate hike by Federal Reserve in US in the near future. Also Nifty crossing below its 50 and 200 DMA added to the fire to the downfall.
Nifty closed at 8361 down around 160 point. The market breadth remained negative as there were seen 1085 stocks advancing against 1736 stocks declining. The Nifty volatility index, India VIX stood at 16.3700 up around 5.90%. The mid-cap and small cap sectors ended down around 1.38% and 1.07% respectively.
All the sectors ended in red and the main losers for the day were Capital goods and Metals which ended down around 2.80% and 2.29% respectively.
The gainers in the stocks’ front were Tech Mahindra and ZEEL, closed up around 2.14% and 0.63% respectively.
The FIIs were net buyers in the cash market segment on 24 July 2015, Friday, bought shares worth Rs 6.62 crore. The DIIs on the other hand were also buyers on 24 July, bought shares worth Rs 196.38 crore in the capital markets segment.
The fall in the Chinese markets led the markets around the globe to a more downside. Also the investors were focusing on the US FED’s policy meet. The US index futures were also trading lower.
Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
A rocky start to the week was expected given the numerous event risks lined up for the next fortnight. The Chinese markets’ fall gave an acute bearish bias at open today, which was exacerbated by MAT and PN themes, as both has a potential on FII flows. FIIs have been largely buyers in equities almost all through this month. While details of MAT report are yet to be made public, the SIT comments largely centred around bringing in effective norms to avoid ghost investors. However, the market’s reaction appears to be far fetched as the proportion of notional PNs over AUC is only around 11%, which pales in comparison with the 50 levels seen in 2007 when SEBI cracked its whip on PN route. With more companies’ earnings to be announced in the coming days, the focus is likely to shift and the nervousness that has dominated today is likely to subside.
Gaurav Jain, Director, Hem Securities
Markets started the derivative expiry week on a weak note. Recommendations of the Supreme Court-appointed SIT on tightening of norms related to Participatory notes (P-notes) and deep cut on global indices spooked the sentiment. Indices continue to witness selling pressure till the last leg of trade.