BSE Sensex tumbled 872.28 points or 1.46% to close at 58,773.87 on Monday and eroding more than ₹6.57 lakh crore of investor wealth in two days, getting the week off to a bad start.
In two straight sessions, the 30-share BSE Sensex has tanked 1,524.13 points or 2.52%.
Global shares have also slipped amid expectation of rate tightening by most central banks, while a modest easing by China served only to highlight troubles in its property market.
The weak trend in the broader market have pulled down the market capitalisation of BSE-listed firms by ₹6,57,758.04 crore to ₹2,73,95,002.87 crore (over ₹273.95 lakh crore) in just two days.
What analysts say
“Though near-term negatives in terms of concerns of depreciating rupee, widening trade deficit and volatility in global crude prices continue to exert pressure on economy and equity markets, we expect strong economic rebound, normalized commodity prices, inflation within a targeted range and better visibility in 2HFY23E,” said Mitul Shah, Head of Research at Reliance Securities.
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities Ltd, said, “While correction was overdue for sometime after the recent upsurge, fresh concerns of a likely hawkish stance by the US Fed in its September meet and strengthening dollar index turned investors jittery and triggered a massive fall in banking, IT, metal and realty stocks.”
“Market sentiment could remain volatile in coming sessions as focus would shift back to global concerns of falling crude oil prices amid weakening demand, and US-China tussle over Taiwan. Technically, a sharp intraday sell off and bearish candle on daily charts is indicating a continuation of weakness in the near future,” Chouhan added.
Analysts says fresh concerns related to the global economic growth have dampened investor sentiments.
“Negative global cues weighed on indices at the Dalal Street as Nifty ended below the psychological 17,500-mark and Sensex too fell way below its recently reclaimed psychological 60,000-mark.
“Blame the negativity to last week’s Fed meeting minutes which pointed towards more aggressive rate hikes to curb inflation. If the last two days’ trade is any indication, then expect investors to stay on the sidelines in the coming session,” Prashanth Tapse – Research Analyst, Senior VP (Research) at Mehta Equities Ltd, said.
Tata Steel was the biggest laggard in the Sensex pack today sliding 4.50%, followed by Asian Paints, Wipro, Sun Pharma, Larsen & Toubro, Bajaj Finance, UltraTech Cement and Bajaj Finserv.
ITC and Nestle India ended higher.
All the BSE sectoral indices ended lower, with metal falling 2.69%, followed by realty (2.47%), basic materials (2.44%), consumer discretionary goods & services (2.01%), finance (1.88%) and bank (1.88%).
In the broader market, the BSE midcap gauge fell 1.80% and the smallcap index declined 1.17%.
“Consolidation was triggered in the market in anticipation of tighter monetary policy by the Fed and worries over a slowdown in global economic activity,” Vinod Nair, Head of Research at Geojit Financial Services, stated.
“Rising dollar index and higher US10 year bond yield act as the near-term headwinds for the market,” Nair said.
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