Sensex crashes over 1,300 points, Nifty ends below 25,850 ahead of Sebi meeting outcome

Stock market news: Benchmark indices indices closed lower today after multiple hitting record highs for multiple sessions in a row. Investors are cautious ahead of the Securities and Exchanges Board of India ( SEBI ) meeting that will be held today where key changes are likely to be announced with regard to futures and options (F&O) trading, mutual funds lite and more.

As of 3:30 pm September 30, the 30-share S&P BSE Sensex ended 1,272.42 points lower at 84,299.78 while NSE Nifty 50 closed 368.10 points lower at 25,810.85.

Both indexes recorded their worst performance since August 5.

Investors are expecting the SEBI board to clear proposal to launch ‘New Asset Class’, regulations with regard to mutual fund lite. In July, the market regulator proposed the introduction of ‘New Asset Class’, that would offer investment products between mutual funds and portfolio management services.

The new category of products, to be introduced under the mutual fund structure, will have a minimum investment limit of Rs 10 lakh.

Sebi also floated a consultation paper to introduce Mutual Fund (MF) Lite regulations for passively managed mutual fund schemes. This relaxed regulatory framework for passive MF schemes is aimed at reducing compliance requirements, increasing penetration, facilitating investment diversification and fostering innovation.

The Indian stock market had been riding high throughout the year, supported by an outsized US rate cut earlier this month, which contributed to the benchmarks marking their fourth consecutive monthly gain. However, the absence of significant domestic triggers led some investors to begin selling off their positions late last week, capitalising on the market rally.

Adding to Monday's sell-off, stimulus measures announced by China over the weekend shifted attention from Indian markets to its larger neighbour, as traders reevaluated their strategies.

In total, 12 out of 13 major sectors ended the day in the red.

"The excitement has shifted to China," said Aishvarya Dadheech, CEO of Fident Asset Management. Investors have rushed into Chinese equities, driven by Beijing's policy incentives and fears of missing out on what many perceive as a potentially historic rally.

"Structurally, the profit margins for metal companies look more promising now, primarily due to the stability in oil and energy prices," said Deven Choksey, managing director of KR Choksey Group.