The regulations require overseas investment vehicles to provide granular details of all entities holding any ownership, economic interest, or exercising control, failing which they must liquidate their domestic holdings.
NSE’s Nifty fell 292.95 points or 1.2% to close at 24,852.15. BSE’s Sensex declined 1017.23 points, or 1.2%, to end at 81,183.93. Banks and oil and gas shares led the selloff.
Foreign portfolio investors (FPIs) net sold shares worth ₹621 crore. Domestic institutions were buyers to the tune of ₹2,121.5 crore.
Elsewhere in Asia, China declined 0.8%, Hong Kong remained flat, South Korea declined 1.2% and Taiwan rose 1.17%. The pan-Europe index Stoxx 600 fell 1%. Fear Gauge Jumps
“We’ve seen the market fall mainly because of global factors rather than local ones as the market is looking forward to the US jobs data,” said Andrew Holland, CEO, Avendus Capital Public Markets Alternate Strategies.
US non-farm payroll data announced on Friday evening showed that hiring trends in August were moderate. This metric will help determine the US Federal Reserve’s interest rate cuts in the months ahead.
Wall Street is betting that the central bank will slash policy rates by at least 25 basis points when it meets on September 17-18. The S&P 500 as down 1.7% while the Nasdaq composite was down 2.3% at the time of going to press on Friday.
“While a 25 basis points rate cut is likely in September, it is already priced in,” said Holland. “What the market would like is for the Fed to frontend the cuts, starting with a 50 basis point rate cut, along with dovish commentary and indications of smaller cuts, which can drive up the indices further.”
So far in September, the Sensex and Nifty have declined 1.7% and 1.8%, respectively.
Analysts said the weakness in the market is seasonal.
“September is a weak month for the Nifty, which has ended negatively in six out of the past ten years (during the month),” said Apurva Sheth, head of research at Samco Securities. “Also, with Nifty going up continuously for 13 sessions until September 3, which happened for the first time in 30 years, we had expected a healthy correction, and Friday’s fall was along our lines of expectations.”
Nifty’s India Volatility Index or VIX, the stock market’s fear gauge, jumped 6.5% to 15.22 on Friday, suggesting caution among options traders. The Nifty Midcap 150 dropped 1.37% and the Nifty Small-cap 250 fell 1.01% at close. Out of the 4,034 stocks traded on the BSE, 2,649 declined and 1,307 advanced on Friday.
