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Indian shares markets crashed today with benchmark Sensex plummeting 839 points amid contemporary India-China border tensions and forward of the brand new margining system to be rolled out on September 1. After rallying 543 points within the morning session and touching the 40,000-mark, the BSE Sensex surrendered all positive factors to shut at 38,628.29, a lack of 839.02 points or 2.13%. Similarly, the NSE Nifty tanked 260.10 points or 2.23% to finish at 11,387.50.
Deepak Jasani, Head of Retail Research, HDFC Securities, mentioned: “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 highest loser within the Sensex pack, plunging over 7%, adopted by SBI, Bajaj Finserv, Bajaj Finance, NTPC, ICICI Bank, Kotak Bank, M&M and Maruti.
Meanwhile, market sentiment was additionally weakened after the discharge of core sector information. The output of eight core infrastructure sectors contracted for the fifth consecutive month, dropping 9.6% in July, primarily resulting from a decline in manufacturing of metal, refinery merchandise and cement. Investors are actually awaiting gross home manufacturing (GDP) information, scheduled to be launched later within 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,” mentioned 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.
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Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments, mentioned: “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)
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