Equity investors got poorer by more than Rs 6.71 lakh crore on Thursday as domestic benchmark indices plunged amid a global market collapse.
The 30-share BSE benchmark Sensex fell 1,416.30 points or 2.61 percent to settle at 52,792.23, tracking weak global markets and continued outflows of foreign funds.
In line with the weak market trend, the market capitalization of BSE-listed companies fell by Rs 6,71,051.73 crore to Rs 2,49.06,394.08 crore.
“The defeat in other Asian indices and European indicators led to a massive sell-off in local stocks as both Sensex and Nifty closed below their crucial psychological levels of 53k and 16k respectively. Investors worried about the risks of stagflation and the more aggressive stance of the Federal Reserve to opt for more rate hikes in inflation, which would have a greater impact on the future economy.
“Until FIIs remain net sellers, the journey south will be difficult to reverse,” said Shrikant Chouhan, head of Equity Research (Retail), Kotak Securities Ltd.
Among the Sensex firms, Wipro, HCL Technologies, Infosys, TCS, Tech Mahindra, Tata Steel, IndusInd Bank and Kotak Mahindra Bank were the big laggards.
ITC, Dr. Reddy’s and PowerGrid were the only winners.
Besides Shanghai, other Asian markets finished lower, with Seoul, Hong Kong and Tokyo losing up to 2.54 percent.
Stock markets in Europe were also sharply lower during the afternoon session.
US stocks ended deep in the red on Wednesday.
Meanwhile, the international oil benchmark Brent oil fell 1.27 percent to $107.7 a barrel.
Foreign institutional investors remained in sell mode, selling shares worth a net Rs 1,254.64 crore on Wednesday, according to stock market data.
“Markets plunged sharply, losing more than 2.6 percent, pressured by weak global signals. The collapse in US markets, fearing aggressive rate hikes, mobilized investors and caused a weak start.
“The situation further deteriorated due to heavy selling in the index majors in sectors where IT and metals majors were among the biggest losers,” said Ajit Mishra, VP – Research, Religare Broking Ltd.