NEW DELHI: Domestic equity market witnessed another session of mayhem with the benchmark indices - NSE Nifty50 and BSE Sensex- plummeting about 1.4% each on Thursday. At close, the Nifty50 was down 1.39% or 265 points at 18,857 while the Sensex shed 901 points or 1.41% to shut shop at 63,148. Going ahead, domestic equities are expected to remain under pressure over rising tensions in the Middle East (Israel-Hamas conflict) and surging US Treasury bills. The US market (S&P 500) fell over 0.5% in the first hour of Thursday trading and if it closes another session with noticeable cuts, its impact will be felt on European and Asian markets on Friday.
Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services, said tension in the Middle East, coupled with sticky US Treasury yields at about 5%, triggered risk-off sentiment. Further mixed Q2 results, continued FIIs selling, rising oil prices and near record high USD/INR to above 83, have also dented investor sentiments. Given the global uncertainties, there could be higher volatility in the near term. This gives long-term investors an opportunity to accumulate quality stocks at lower levels,” added Khemka.
All sectors traded in sync and closed in the red wherein auto, metal and banking were among the top losers. The selling was so widespread that only 4 stocks in the Nifty50 pack closed in green. In the past six sessions, the Sensex has plummeted 3,227 points and the Nifty has declined by 934 points. This significant correction of about 5% comes amidst growing tensions in the Middle East and its potential impact on the global economy. A bunch of other negative developments, some of which can be attributed to the Israel-Hamas conflict, have also escalated the selling pressure.
Owing to the ongoing selling spree, the overall market capitalisation of all BSE-listed firms on Thursday came down to nearly Rs 306 lakh crore from Rs 323.8 lakh crore six sessions back, making investors poorer by Rs 17.8 lakh crore. On Thursday alone, investors’ loss stood at about Rs 3 lakh crore. The surge in 10-year US Treasury yields closer to its 16-year high of 5% and a dull show put up by key corporations in the September quarter has also spooked investors. As government bonds are favoured over equities during volatile times.
