At 14:25 IST, the barometer index, the S&P BSE Sensex, declined 444 points or 1.14% at 38,546.24. The Nifty 50 index slipped 123.6 points or 1.05% at 11,399.30.
In the broader market, the S&P BSE Mid-Cap index fell 1.02% while the S&P BSE Small-Cap index lost 0.55%.
The market breadth was weak. On the BSE, 1050 shares rose and 1563 shares fell. A total of 180 shares were unchanged.
Foreign portfolio investors (FPIs) bought shares worth Rs 7.72 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 120.08 crore in the Indian equity market on 3 September 2020, provisional data showed.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 2,63,09,711 with 8,68,805 deaths. India reported 8,31,124 active cases of COVID-19 infection and 68,472 deaths while 30,37,151 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Sebi's New Margin Requirement:
Introduction of new margin requirement in the cash segment from 1 September 2020 also put pressure on the bourses. As per the new rule, it is mandatory for brokers to collect margins from investors upfront for any purchase or sale of shares. Failing to do so will attract a penalty.
Sebi had initiated a change in margin collection norms from 1 September 2020, but the process did not see a smooth pick-up, as it was marred by tech glitches and chaos. This chaos has resulted in a significant fall in derivative positions.
The National Stock Exchange (NSE) issued a circular on Thursday, extending the deadline for the imposition of penalty on brokers for not collecting adequate margins by fifteen days till 15 September 2020.
Numbers to Track:
In the foreign exchange market, the partially convertible rupee edged higher to 73.14 compared with its previous closing 73.47.
The yield on 10-year benchmark federal paper rose to 5.93% compared with previous closing of 5.896% in the previous trading session.
In the commodities market, Brent crude for November 2020 settlement rose 18 cents to $44.25 a barrel. The contract fell 0.81% to end at $44.07 in the previous trading session.
MCX Gold futures for 5 October 2020 settlement rose 0.02% to Rs 50,753.
RBI Guidelines:
The Reserve Bank of India revised guidelines for priority sector lending as new rules will help in better penetration to credit deficient areas. The RBI doubled loan limits for companies in renewable energy segment. Loan limits for renewable energy companies have been increased to Rs 30 crore from earlier Rs 15 crore.
Inox Wind was up 1.98% while Sterling Wilson & Solar surged 6.34% higher to Rs 273.35.
Buzzing Index:
The Nifty Metal index slipped 1.84% to 2,480.85, falling for second consecutive trading session.
Jindal Steel & Power (down 3.64%), JSW Steel (down 2.59%), NMDC (down 2.48%), Tata Steel (down 1.99%), Steel Authority of India (down 1.67%), National Aluminium Company (down 1.6%), Coal India (down 1.22%), Hindustan Zinc (down 0.93%), Vedanta (down 0.9%) and Hindalco Industries (down 0.57%) declined.
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