Market crash wipes over 6.57 lakh crore of investor wealth in 2 days

BSE Sensex fell 872.28 points or 1.46% to close at 58,773.87 on Monday and erode more than 6.57 lakh crores of investor wealth in two days is a bad start to the week.

In two consecutive sessions, the 30-stock BSE Sensex has accumulated 1,524.13 points or 2.52%.

Global equities also fell amid anticipation of rate hikes by most central banks, while a slight easing from China only served to highlight problems in its market. immovable.

The weak broader market trend caused the market capitalization of BSE-listed companies to fall by 6 57,758.04 crore to 2,73,95,002.87 crores (more 273.95 lakh crore) in just two days.

What analysts say

“While short-term negative effects in terms of fears of Rupee depreciation, widening trade deficit and volatility in global crude prices continue to put pressure on the economy and stock markets, we expect a 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 the correction has been expected for some time after the recent upsurge, renewed concerns over a likely hawkish stance by the US Fed during of its September meeting and the strengthening of the dollar index turned nervous investors and triggered a massive fall in banking, IT, metals and real estate stocks.

“Market sentiment could remain volatile in the coming sessions as attention shifts back to global concerns over falling crude oil prices amid weakening demand and a fight between the US and China. about Taiwan. Technically, a strong intraday selloff and a bearish candle on the daily charts indicate continued weakness in the near future,” Chouhan added.

Analysts say renewed concerns over global economic growth have dampened investor sentiment.

“Negative global indices weighed on the Dalal Street indices as Nifty finished below the psychological mark of 17,500 and Sensex also fell well below its recently recovered psychological mark of 60,000.

“Blame the negativity in minutes from last week’s Fed meeting which pointed to more aggressive rate hikes to rein in inflation. If trading over the past two days is any indication, expect investors to stay on the sidelines in the next session,” Prashanth Tapse – Research Analyst, Senior Vice President (Research) at Mehta Equities Ltd, said.

Tata Steel was the biggest laggard in the Sensex pack today, slipping 4.50%, followed by Asian Paints, Wipro, Sun Pharma, Larsen & Toubro, Bajaj Finance, UltraTech Cement and Bajaj Finserv.

ITC and Nestlé India finished higher.

All BSE sector indices ended lower, with metals down 2.69%, followed by real estate (2.47%), basic materials (2.44%), consumer discretionary goods and services ( 2.01%), finance (1.88%) and banking (1.88%). .

In the broader market, the BSE mid cap index fell 1.80% and the small cap index 1.17%.

“Consolidation was triggered in the market in anticipation of Fed monetary policy tightening and concerns about a slowdown in global economic activity,” said Vinod Nair, head of research at Geojit Financial Services.

“The rising dollar index and rising US 10-year bond yield are acting as near-term headwinds for the market,” Nair said.

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