NEW DELHI: Bears took full control of the Dalal Street on Friday as Indian equity benchmark indices - Sensex and Nifty - fell over 1.5% each and over Rs 8.42 lakh crore of investors’ wealth (BSE market capitalisation) was wiped out in a single session.
Sensex gave up its 60,000-level and fell 981 points or 1.61% to end at 59,845, while broader Nifty shed 320.55 points or 1.77% to close at 17,807. Owing to rising covid-19 fears, a looming recession and growth concerns, this is the fourth straight session when Indian equities are closing in the red. A better-than-expected third quarter (Q3) US GDP data also spooked investors as it signals more rate hikes by the US Fed to tame inflation.
During the last four trading sessions, the market capitalisation of BSE listed firms fell Rs 15 lakh crore and at Friday’s closing it stood at Rs 272.53 lakh crore. Sensex and Nifty50 have now corrected more than 5% from their record highs that were recorded on December 1, 2023. Amol Athawale, deputy vice-President - technical research at Kotak Securities, said markets were caught in frenzied selling as weak global cues and bearish external factors pushed both key benchmark indices below psychological levels.
“Besides the spurt in Covid cases in China & Japan, the better-than-expected US Q3 GDP numbers further raised concerns that the Fed will go for more rate hikes to tame inflation, which further accentuated selling pressure,”added Athawale.
The selling pressure on Friday was so intense that all key indices closed in red and seven out of every eight stocks closed the session with a cut. Sectorally, Nifty PSU Bank nose-dived over 6%, Nifty Media fell 5% and Nifty Metal 4.47%. Realty and oil & gas also plummeted over 3%.In the Sensex pack, Tata Steel fell most at 5 %, followed by Tata Motors at 4%. Index heavyweight RIL, Bajaj Finserv and SBI fell about 3% each.
“A sea of red engulfed markets today with multiple headwinds deterring investors and such was the damage across sectoral indices that they literally waited for markets to shut for the day. The sheer speed with which the Sensex came back below 60K today clearly reflected the mood to be in cash with several participants facing margin calls due to marked-to-market losses,” said S Ranganathan, head of research at LKP Securities. Ajit Mishra, VP - Technical Research, Religare Broking said indications are pointing towards prevailing corrective move to extend further, with a marginal rebound in between.