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Fall in major Asian markets and continued weak global cues led to sharp decline in the benchmark indices Sensex and Nifty by around 1.5 per cent. Sensex fell by 843 points to close at 57,147. The Nifty index was down by 257 points at 16,983.
A new rule with regard to settlement of all client accounts came into effect from last Friday has sucked some cash from broker accounts and it will take a few days for it to return, brokers told businessline. Around ₹25,000-30,000 crore worth of liquid cash was transferred into the clients accounts on last Friday (Oct 8), brokers said. Markets were also under pressure as its Asian counterparts including Hang Seng and Nikkie fell by 2.2 per cent and 2.6 per cent, respectively. In the US, the stock futures were flat when the Indian markets were open. Market regulator SEBI has mandated that brokers settle all the client accounts across the markets at least once on the first Friday of each quarter. Hence, brokers and clearing corporations of the stock exchanges transferred the entire collateral back to the clients. Foreign portfolio investors (FPIs) continued selling. Data showed they sold stocks in cash markets worth ₹4,612 crore. In the index futures segment they were net sellers for ₹1,015 crore and in stock futures they sold worth ₹1,659 crore. Domestic institutional investors made net purchases of ₹2,430 crore in the cash market. Declining shares outnumbered the advancing shares where advance decline ratio stood at 0.46 on BSE. “After a range-bound action in the last few sessions, the market is now showing signs of revisiting its crucial support of around 16800 levels in the short term. The positive sentiment created by the upside recovery of Monday has been nullified on Tuesday and this market action is now unfolding the negative sequence like lower tops and bottoms on the daily chart. After the formation of lower top at 17428-6th Oct, the Nifty is expected to slide down to the recent lows in the coming sessions,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
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