The Hindu Business Line : NSE's ad hoc margins pull down market

STOCKS continued to fall for the second day on Friday as most of the market players wound their positions down following NSE's decision to impose ad hoc margins in the derivatives segment. The sharp fall in today's trading was also due to some short-selling.

Prices opened firmly in the morning but the inability of the brokers to pay ad hoc margins resulted in unwinding their positions in the derivatives market and the impact of this was seen in the cash market.

Several brokers who have been asked by the NSE to pay the ad hoc margins were unhappy with the exchange's decision. They said it is difficult for their clients to pay the margins in a short period of time.

Brokers said the exchange had called them during the trading time yesterday for paying the ad hoc margins before the opening of the market on Friday.

At close, the BSE Sensex was down by 83.33 points (1.68 per cent) at 4,865.83 and on the NSE, S&P CNX Nifty closed at 1550.45, down 29.5 points (1.87 per cent). The fall in broader indices such as S&P CNX 500 and CNX Mid Cap was more. The S&P CNX 500 index fell by 2.04 per cent and CNX Midcap fell by 2.02 per cent. The selling in broader indices was on profit-taking as in the last few trading sessions small and mid-cap stocks had run-up fast.

With today's fall the BSE Sensex is down by 140 points in the last two trading sessions.

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