The S&P BSE Sensex slipped over 400 points in trade today amid worries over a likely tightening of participatory notes (P-notes) rules. A sharp fall in Asian markets added to the sentiment.The 50-share Nifty index below its crucial psychological support level of 8,400. Bank Nifty fell over 300 points, weighed down by selling in private lenders such as ICICI Bank and Axis Bank.

The market sentiment was hurt by fears that the government may accept the Supreme Court-appointed special investigation team’s proposal to tighten rules on participatory notes.During in the day, Finance Minister Arun Jaitley cleared the air by saying that it was too early to comment on government decision on SIT suggestions. “Government will not take any view that will hurt investment climate in India”, he added.
P-notes are instruments issued by registered FIIs to overseas investors, who wish to invest in the domestic stock market without registering themselves with Sebi.The SC panel has asked SEBI to obtain ‘beneficial ownership’ details for such instruments.

Market breadth remained weak, with six of every 10 BSE stocks trading in the negative terrain.But Shaktikanta Das, Revenue Secretary, in an interview to ET Now, said, “Markets should not pre-judge P-notes issue; the government will study SIT report before any decision is made.”
Global cues too were not supportive. China’s industrial profits declined 0.3 per cent YoY in June, the flash Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) contracted to 48.2 for July, compared with a final reading of 49.4 in June.

During trading hours, stocks of Lupin fell nearly 2 per cent after shareholders’ approved plan to raise Rs 7,500 crore via securities
Most Asian markets were trading in the red. China’s mainland index Shanghai Composite witnessed its worst intrday percentage fall in over eight years to eventually settle the day 8.48 per cent down, or 345.35 points at 3,725.56. Andrew Freris, Ecognosis Advisory, in an interview to ET Now said, “Fall in Chinese markets has nothing to do with global factors and would expect to see a further fall ”

Hong Kong’s Hang Seng slipped about 800 points. Japan’s Nikkei closed the session 0.95 per .. Weakness persisted after the Dow Jones Industrial Average last week posted its worst weekly fall since January.Meanwhile, rupee tumbled for the fourth straight session, depreciating 5 paise to 64.09 against dollar to hit a fresh five-week low in trades today. The currency market was keenly awaiting the forthcoming two-day US Fed policy meet beginning Tuesday that is expected to shed some light on the kick start of interest rate hike cycle.

Source:http://economictimes.indiatimes.com/markets/stocks/news/sensex-slips-over-400-points-nifty-below-8400-shanghai-composite-sees-biggest-loss-in-8-years/articleshow/48233397.cms