Benchmark domestic stocks plunge over 2 per cent amid negative global cues

Domestic stocks markets on Monday, August 31, 2020, ended sharply low amid SEBI's new margin rule, increases cases of COVID-19 and India-China geopolitical tensions. Benchmark domestic stocks today plunged more than two per cent amid negative global cues.

The barometer index, the S&P BSE Sensex fell 839.02 points or 2.13 per cent to 38,628.29. It opened in higher at 39,888.15 and touched the intraday high of 40,010.17 and then reversed the trend to hit the intraday low of 38,395.89

Similarly, the Nifty 50 index fell 260.10 points or 2.23 per cent at 11,387.50. It opened higher at 11,777.55 and touched the high of 11,794.25 before hitting the intraday low of 11,325.85 in the mid-afternoon trade. The broader market at BSE underperformed the Sensex. The BSE Mid-cap tumbled 3.79 per cent while the Small-cap index crashed 4.37 per cent. Investors were concerned as SEBI's new upfront margin collection norm in the cash market will kick start from tomorrow, .i.e. September 1, 2020.

The new regulations stipulate that all investors need to bring in upfront margins for selling their stocks or for making any purchases. It says that the stocks lying in the investors' Demat account, which were equivalent to margin available till now, will now be replaced with the pledging of these shares to the broker. The media reports of the fresh clash between Indian and Chinese troops at Pangong in Ladakh near Line of Actual Control on the intervening night of August 29-30, 2020, dented the sentiments. The report suggested that the Indian forces retaliated strongly to China's plans to change the status quo at the LAC.