InvestorQ : Why did the Sensex crash by 800 points on 31 August 2020?
Ria Jain made post

Why did the Sensex crash by 800 points on 31 August 2020?

Answer
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Dia Deshpande answered.
3 weeks ago


Sensex reversed its winning run and closed nearly 800 points lower. In fact, from its highest levels, the Sensex plunged almost 1000 points intraday. All sectoral indices were in the red with the Nifty bank slipping 3.6% and the A/D ratio of the Nifty was at 2:48.

The rising tensions on the Indo-China border and a fresh effort to thwart the Chinese intrusion at the Pangong border led to panic in the market and that that triggered the sharp fall. The risk appeared to only escalate through the day.

Banks were expecting an extension of the EMI moratorium and with that not coming through it will be a tryst with reality leading to the sharp fall in the index. Also, the SEBI insisting that the new margining rules would be effective from 01 September also spooked traders as they opted to stay out of the market.