Sensex, Nifty tank 1.5%: What triggered this fall?

The broader Nifty lost 368.1 points, or 1.41 per cent, to finish at 25,810.85. The 50-share index lost 384.85 points during intraday deals.

Why have Sensex and Nifty fallen?

Markets barometers, the Sensex and the Nifty ended lower as investors turned risk averse following the rise in geopolitical tensions.

“Global markets turned topsy turvy under the threat of rising geopolitical risk in the Middle-East and plausible increase in Yen interest rate which can reduce cross country investments in equity,” said Vinod Nair, Head of Research, Geojit Financial Services.

Concerns over FII money flowing to China due to the monetary and fiscal stimulus announced by the Chinese authorities also resulted in selling the market.

“The Chinese market had a resurgence due to a large stimulus package and cheap valuation. India also weakend under the global pressure and premium valuation while metals are expected to outperform in the near-term,” Nair said.

Globally, if the Israel-Hezbollah war escalates further, nervousness could fuel panic selling going ahead, said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

“While valuations are already on a higher side, the focus would now shift to RBI credit policy announcement next week and the start of quarterly earnings season,” Tapse said.

What are the key announcements expected of SEBI’s board meet?

The SEBI board is expected to clear the proposals to introduce ‘New Asset Class’, mutual fund lite regulations and launch of a product which would be a combination of rights issue and preferential allotment of shares.

One of the crucial reforms which the board may announce is tighter regulations for Futures & Options (F&O) trading, which has been a concern area for the government and other regulators. In order to curb speculative trading in the Futures & Options (F&O) segment, the SEBI, in July this year, proposed a series of short-term measures, including restricting multiple option contract expires, raising the size of options contracts and intraday monitoring of position limits.

The expectation of tighter F&O norms resulted in fall in the domestic market.

Which stocks fell the most?

Profit taking in Reliance Industries stock and banking counters coupled with a slump in Japan’s Nikkei index spooked Indian markets that saw both Sensex and Nifty crash nearly 1.50 per cent each, said Mehta Securities’ Tapse.

Forty one out of 50 Nifty stocks and 25 of Sensex companies ended in red on Monday.

Among the NSE firms, the stocks that declined the most were Hero Motocorp (4.03 per cent), Axis Bank (3.29 per cent), Trent (3.20 per cent), Reliance Industries (3.13 per cent) and Bharat Electronics Ltd (3.05 per cent).

Nifty Bank dipped 1.59 per cent.