NEW DELHI: In a troublesome session for investors in the Indian equity market, investors lost a whopping Rs 13.5 lakh crore on Wednesday.
Heavy selling in midcap and smallcap stocks due to expensive valuation concerns had a spillover impact on blue chips. Despite starting the trading session in green after India reported softening inflation on Tuesday, the key benchmark indexes- NSE Nifty50 and BSE Sensex- settled with a steep cut of up to 1.5%.
The 30-share Sensex closed the Wednesday session 906.07 points or 1.23% lower at 72,761.89 while the Nifty 50 closed at 21,997.70 level, down 338 points or 1.51%. The combined market capitalisation of all BSE-listed firms came down to Rs 372.1 lakh crore, down from Rs 385.6 lakh crore in the previous session, wiping out Rs 13.5 lakh crore.
“In contrast to the global uptrend, unfavourable risk-reward balance of mid and small-cap stocks, fuelled by prolonged premium valuations, has aggravated the downfall…Other than the premium valuation no fundamental issue is noticed to drawback the long-term growth image of domestic midcaps,” said Vinod Nair, Head of Research, Geojit Financial Services. Pravesh Gour, Senior Technical Analyst at Swastika Investmart, said that other factors contributing to the decline is the increase in US bond yields after US CPI inflation data and selling pressure on index heavyweights like Reliance Industries (RIL) and a few Tata group members.
Among the sectoral indices, only the FMCG pack closed the Wednesday session in red, thanks to a 4% gain in the shares of heavyweight ITC. All other sectoral indices ended with losses with the Media, Metal and Realty pack shedding more than 5% each.
Investors also dumped PSE (public sector enterprises) stocks, which not very long time ago were in high demand, to such an extent that all the 20 constituents of the Nifty PSE index ended lower. The overall market breadth was predominantly red as only 350 stocks closed in green while 3,569 stocks settled with a cut. The biggest laggards in the Nifty50 pack were Power Grid Corporation, Coal India, Adani Enterprises, Adani Ports, NTPC, Tata Steel and ONGC as these stocks fell in the range of 5-7%.
M-cap of BSE-listed firms down at Rs 372.1L cr
The 30-share Sensex closed the Wednesday session 906.07 points or 1.23% lower at 72,761.89 while the Nifty 50 closed at 21,997.70 level, down 338 points or 1.51%. The combined market capitalisation of all BSE-listed firms came down to Rs 372.1 lakh crore, down from Rs 385.6 lakh crore in the previous session, wiping out Rs 13.5 lakh crore
