Indian Stock Markets Fall as SEBI Deadline for Foreign Investors Ends
Indian stock markets corrected sharply on Thursday amid global cues and FPI selling, as today marks the last day of the SEBI deadline for unregistered foreign investors to disclose beneficial owners. The Sensex index declined by over 1,000 points, or 1.23 per cent, to 81,190 points, while the Nifty 50 index lost 290 points, or 1.15 per cent, to 24,854 points at the time of filing this report.
Reasons for the Market Fall
Experts noted several reasons for today’s fall. Globally, markets are uncertain amid major economic data expected today, including US payroll data and Fed rate cut expectations. Ajay Bagga, a Banking and Market Expert, said, “Indian markets are falling due to global cues, especially the incoming US non-farm payroll data for August that will be released later this evening, India time. Domestically, political risk is rising with state elections coming up and with a major ruling coalition partner hobnobbing with opposition leaders.”
Additionally, today marks the deadline for foreign investors to disclose beneficial owners. According to SEBI, failure to comply will result in the disqualification of FPIs from investing in India, and they will need to wind up their investments. Experts cited this as a probable reason for the selloff.
Market Indices and Sectoral Performance
India’s volatility index, India VIX, surged by 5.84 per cent to stand at 15.04 points. In broad market indices, the Nifty Midcap 50 index saw the largest decline, down 1.34 per cent, while the Nifty Next 50 and Nifty 100 both declined by more than 1 per cent. Vijay Chopra, a Stock Market Expert, said, “The correction of 2 to 3 per cent is not a fall, as the markets are trading at an all-time high. The reason for this selling is the reports that non-registered FPIs will not be able to operate in the market, which is also creating pressure. The markets are also sensitive ahead of the Fed rate cuts; if the Fed announces a rate cut, the markets will rebound strongly.”
Among sectoral indices, the highest pressure was on the Nifty PSU Bank index, which declined around 3 per cent, followed by Nifty Bank, down 1.35 per cent, and Nifty Oil & Gas, down 1.97 per cent. On the Nifty 50 list on NSE, only 9 stocks advanced, while 41 stocks declined at the time of filing this report.
Friday Opening Session
During the opening session on Friday, the Nifty 50 index opened with a dip of 52 points, or 0.2 per cent, at 25,093.35 points, while the BSE Sensex index declined by 0.04 per cent, or 30 points, to open at 82,171.64 points.
Doubts Revealed
SEBI -: SEBI stands for the Securities and Exchange Board of India. It is a government agency that regulates the stock markets in India to protect investors and ensure fair trading.
Sensex -: Sensex is a stock market index that measures the performance of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE) in India.
Nifty 50 -: Nifty 50 is another stock market index, but it measures the performance of 50 large companies listed on the National Stock Exchange (NSE) in India.
US payroll data -: US payroll data refers to the number of jobs added or lost in the United States each month. It is an important indicator of the health of the US economy.
Nifty Midcap 50 -: Nifty Midcap 50 is an index that tracks the performance of 50 mid-sized companies listed on the National Stock Exchange (NSE) in India.
Nifty PSU Bank -: Nifty PSU Bank is an index that tracks the performance of public sector banks listed on the National Stock Exchange (NSE) in India.
Nifty Oil & Gas -: Nifty Oil & Gas is an index that tracks the performance of companies in the oil and gas sector listed on the National Stock Exchange (NSE) in India.
