NEW DELHI: Domestic equity market fell sharply on Wednesday with the benchmark indices -- BSE Sensex and NSE Nifty50 -- crashing more than 1% each due to weak global cues, and selling in Reliance Industries Ltd and bank stocks.
The selling pressure was more severe in the mid-cap and the small-cap pack and in total investors lost Rs 6 lakh crore in a single session as the m-cap of all BSE listed companies came down to Rs 385.97 lakh crore.
The BSE Sensex ended the Wednesday session 790.34 points or 1.08% lower at 72,304.88 while the Nifty50 slumped 247.20 points or 1.11% to shut shop at 21,951.15. All the sectoral indices closed with a cut on Wednesday with the auto, oil & gas, power and realty falling 2% each.
Index heavyweight Reliance Industries Ltd (RIL) dragged the Nifty50 pack the most as heavy weightshed nearly 2%. The other top laggards were ICICI Bank, Power Grid Corporation and Maruti Suzuki India.
“Indian markets were jittery mirroring weak global markets. Global investors are awaiting the key US economic data like personal consumption expenditure, in anticipation of good forecast there is a fear that Fed rate cut maybe delayed. Turmoil in China’s property sector further impacted the Asian market trend,” said Vinod Nair, Head of Research, Geojit Financial Services.
Nair added that profit booking weighed on Indian markets, fuelled by concerns about India’s Q3 GDP growth potentially slowing to 6.6% from 7.6% in Q2. Rate-sensitive sectors faced pressure, contributing to broader market underperformance, led by FIIs selling. Foreign institutional investors sold (net) equities worth Rs 1,879 crore on Wednesday.
Prashanth Tapse, Senior VP (Research), Mehta Equities, said that there will be strong bouts of intra-day volatility going ahead as the wait for interest rate cuts is getting longer, and hence investors are taking selective bets in view of the already stretched valuations.
Midcap and small-cap shares’ respective indices fell around 2% each. One of the key reasons for this broad selling is attributed to an advisory from mutual fund body AMFI to its member asset management companies which asked them to put in place a policy to protect investors in smallcap and midcap segments.
AMFI has asked fund houses to take proactive measures to protect investors, including but not limited to moderating inflows and portfolio rebalancing, etc.