Several brokers used shares of dormant or inactive clients to provide margins for other more active clients. This prompted Sebi to rework its entire system of pledging.
ONGC was the top gainer which surged over 4% followed by Axis, SBI, CIL
Sector-wise, banking, IT, pharma and realty indices drove the market momentum.
In the past four months, $7.5 billion has flowed back into domestic stocks, helping the benchmark indices bounce back more than 40 per cent from their 2020 lows.
Inflation and political unrest in Egypt will haunt shares in the near term
The fall came on the back of a massive selloff in NBFCs, led by DHFL which skidded over 50 per cent on fears of a liquidity crisis.
HDFC and HDFC Bank were the biggest losers in the Sensex pack, plunging 5.09 per cent and 3.32 per cent, respectively, after the private bank reported a rise in non-performing assets.
In the Sensex pack, index heavyweight Reliance Industries fell 2.84 per cent to Rs 1,057.15 after reports that the company's oil assets may take a hit due to the government's imposition of cost controls on soaring petrol and diesel prices.
Since the Budget announcement on July 5, FIIs have been busy unloading their stock.
The agency said, 'The downgrade reflects Moody's expectation that China's financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows.'
The biggest losers of the session include Reliance, Infosys, TCS, ICICI Bank, HDFC twins, ITC, Maruti, L&T, HUL, Axis Bank, Wipro and IndusInd Bank, cracking up to 4 per cent.
'Equities are likely to be range-bound with a downward bias for the remaining part of the year.'
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Dealers cited some dollar selling by state-run banks in the session, which some said may be on behalf of the central bank.
Gold, forex assets, IT sector, pharma. Devangshu Datta explains why each of these is a good hedge against market shocks at this time.
The rupee had dropped 15 paise or 0.22 per cent yesterday.
Long-term investors should consider moving into smaller stocks. Rather than try to pick stocks, it makes sense to build a diversified portfolio by exposure across midcap and small caps funds, suggests Devangshu Datta.
Monday's drop followed an 8.5 per cent slump in Chinese markets.
Investors should consider debt mutual funds, banks fixed deposits or high-rated corporate debt instruments.
The Nifty shed 49 points to close at 1,763.
While the long-term sustainable job recovery in the US markets could be a possibility in the not so distant future, there are no such luxuries for its Indian counterpart.
In overseas trade, the American currency traded lower against the yen and the euro in an Asian session as well as modest profit-taking after recent sharp gains
Rupee ends at 61.89 against the dollar, falls for second straight day.
Emerging market currencies including Indian rupee are likely to remain under pressure, though depreciation is expected to slow from here, Barclays said in a research report.
The Sensex has now lost 878.32 points in six sessions -- its longest string of losses in six months.
Other losers included Vedanta, Tata Steel, NTPC, ONGC, L&T, M&M, Coal India, Maruti, PowerGrid, Axis Bank, ITC and HDFC, dropping up to 5.75 per cent. On the other hand, Kotak Bank, Bharti Airtel, HCL Tech, Bajaj Finance and Hero MotoCorp rose up to 0.95 per cent.
Spread investments in equities, bonds, gold and cash to tackle volatility advise Nitin Singh, MD and head, and Vinay Joseph, director, investment strategy, Standard Chartered Wealth Management, India.
Oil fell below $59 a barrel for the first time since May 2009 on Tuesday, extending a six-month selloff as slowing Chinese factory activity and weakening emerging-market currencies added to concerns about demand.
Skittish investors snapped up gold and other safe-haven assets amid fears of a global economic slowdown
The Dow has never lost more than 800 points in a day.
Financials and auto stocks were the top losers while energy and IT shares recovered
Sensex lost 184 points to trade at 23,878 and the Nifty has dropped 55 points to quote at 7,254.
At a time when the whole world is going ga-ga over stocks and debt is too easy to borrow, do not forget gold, says Anil Rego.
Given that there are hundreds of players in the shadow banking space, it's hard to make a credible estimate of potential NPAs. That creates more scope for panic, says Devangshu Datta.
S&P BSE Midcap index and S&P BSE Smallcap were down 2% and 1.3% respectively
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The Reserve Bank of India late on Wednesday unveiled rules to restrict how much its citizens and companies can invest abroad and announced additional curbs on gold imports.
Coca-Cola will sell off its bottling business in India in the next few years.
UBS reiterated its Nifty target of 9,200 by December as it expects growth to gather steam
SBI plunged over 3% after posting a 34.57% fall in net profit to Rs 2,538 crore for the quarter ended September 2016 on rise in provisions for non-performing loans.
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