Indian Stock Markets Plummet Amid SEBI Deadline and Global Cues

Indian stock markets witnessed a substantial decline on Thursday due to global cues and FPI selling. Key indices, Sensex and Nifty 50, dropped sharply as the SEBI deadline for unregistered foreign investors to disclose beneficial owners loomed, prompting significant market volatility.

Indian stock markets faced a sharp correction on Thursday, driven by global cues and selling pressure from Foreign Portfolio Investors (FPI). The correction coincides with the SEBI deadline for unregistered foreign investors to disclose their beneficial owners. The Sensex index dropped over 1,000 points, or 1.23 percent, to 81,190 points. Simultaneously, the Nifty 50 index fell by 290 points, or 1.15 percent, to 24,854 points.

Experts attributed the market downturn to a confluence of factors. Globally, markets are jittery in anticipation of key economic data, including US payroll data and Federal Reserve rate cut expectations. 'Indian markets are reacting to global cues, particularly the incoming US non-farm payroll data for August, set to be released later this evening,' said Ajay Bagga, a Banking and Market Expert. Domestically, rising political risks with upcoming state elections and the SEBI deadline for foreign investors added to the pressure. According to SEBI, failure to comply will result in disqualification from investing in India. This deadline is seen as a probable trigger for the selloff.

India's volatility index, India VIX, surged by 5.84 percent to 15.04 points. The Nifty Midcap 50 index registered the most significant decline among broad market indices, dropping 1.34 percent. Additionally, the Nifty Next 50 and Nifty 100 both saw declines of over 1 percent. 'The correction of 2 to 3 percent is not a cause for alarm as markets are trading at all-time highs. However, reports that non-registered FPIs will be barred from the market have created additional pressure,' noted Vijay Chopra, a Stock Market Expert. The forthcoming Federal Reserve rate announcement could see markets rebound if a rate cut is declared.

The sectoral indices also reflected heavy selling pressure. The Nifty PSU Bank index fell around 3 percent, followed by the Nifty Bank index down 1.35 percent, and the Nifty Oil & Gas index down 1.97 percent. On the NSE Nifty 50 list, only nine stocks advanced, while 41 stocks declined by the time of this report.

As trading commenced on Friday, the Nifty 50 index opened with a 52-point dip, or 0.2 percent, at 25,093.35 points. Meanwhile, the BSE Sensex index opened down by 0.04 percent, or 30 points, at 82,171.64 points.

(With inputs from agencies.)