Sensex, Nifty dive on SEBI’s new rules for F&O trading, geo-political concerns

The Indian equity benchmarks nosedived on Thursday as investor sentiment took a knock after market regulator Securities and Exchange Board of India ( SEBI ) issued new rules for futures and options trading to curb speculative trading. Rising tensions in Middle East after Iran attacked Israel with over 200 missiles also added to the negative sentiment on Dalal Street, analysts said. The Sensex fell as much as 1,264 points and Nifty 50 index touched an intraday low of 25,452.

As of 9:16 am, the Nifty was down 267 points at 25,530 and Sensex dropped 766 points to 83,500.

SEBI has increased the contract size for index derivatives to a minimum of Rs 15-20 lakh from Rs 5-10 lakh. The regulator noted that this will be in lieu of market growth and protection of investors in the risky environment. SEBI 's move came after a report published recently revealed that 93 per cent of retail traders, over 1 crore participants have suffered losses in the F&O segment. Losses averaged Rs 2 lakh a person between FY22 and FY24 and total losses during that time exceeded Rs 1.8 lakh crore.

Most of the Asian markets were trading with a positive bias with Japan's Nikkei rising 2.31 per cent, Singapore's Straits Times up 0.14 per cent and Taiwan Weighted rising 0.75 per cent. Stock markets in China are shut for the week for holiday.

Back home, selling pressure was broad-based as all the 13 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Auto index's 2 per cent fall. Nifty Oil & Gas, Healthcare, Realty, PSU Bank, FMCG and IT indices also fell over a per cent each.

Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 index fell 1.13 per cent and Nifty Smallcap 100 index declined 1.28 per cent.

Bharat Petroleum was top Nifty loser, the stock fell 3.14 per cent to Rs 356. Eicher Motors, Asian Paints , Mahindra & Mahindra, Wipro , Tata Motors, Tata Consumer Products, Bajaj Auto, Maruti Suzuki and Bharat Electronics also fell between 1.6-3 per cent.

On the flipside, JSW Steel , ONGC and Britannia were among the notable gainers.

The overall market breadth was extremely negative as 2,221 shares were declining while 817 were advancing on the BSE.