Sensex tumbles 1,900 pts, Stock market crash wipes off Rs 5.3 trillion of investor wealth
Selling was across the board on Friday with financial stocks falling the most. Housing Development Finance Corp and HDFC Bank were the top two drags on the Nifty, slipping 2.7% each. Overnight, U.S. Treasury yields vaulted to their highest since the pandemic began, sending MSCI’s broadest index of Asia-Pacific shares outside Japan 2.4% lower on Friday.
Investor wealth slumped by a whopping Rs 5.3 trillion on Friday as the benchmark BSE Sensex crashed more than 1,900 points to post its biggest single-day fall in nearly ten months.
Indian shares fell sharply on Friday ahead of December-quarter gross domestic product data, as a spike in global bond yields stirred up inflation worries and spooked investors across the world.
At the close of trade, the total market capitalisation of BSE-listed companies eroded by Rs 5,37,375.94 crore to Rs 2,00,81,095.73 crore.
The total market capitalisation of these companies stood at Rs 2,06,18,471.67 crore on February 25.
On Friday, the 30-share BSE Sensex settled 1,939.32 points or 3.80 per cent lower at 49,099.99 -- its worst one-day fall since May 4 last year.
Similarly, the broader NSE Nifty plunged 568.20 points or 3.76 per cent to close the session at 14,529.15. It was the biggest single-day drop since March 23 last year.
"Going ahead the market may continue with its consolidation given weak global cues. Investors would closely track bond yields, geopolitical tensions and inflation data for further market direction and would monitor developments around new US stimulus announcement," Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd said.
He noted that even high valuations does not provide much comfort and thus correction was long overdue.
"Investors should take this opportunity to buy on dips while traders should trade cautiously with stock-specific action and book profits in regular intervals," he said.
Sector wise, banking index suffered the maximum loss with a decline of over 4.8 per cent. Financial and telecom indices too fell sharply by 4.9 per cent and 3.85 per cent, respectively.The S&P BSE Sensex tumbled 1,800 points and gave up 50,000 to hover around 49,230-mark. The Nifty50 index, meanwhile, fell below the 14,600 level. ICICI Bank, IndusInd Bank, and Axis Bank fell 3 per cent each and were the top Sensex laggards.
Still, both indexes were on course to end the month nearly 10% higher, thanks to solid corporate earnings and a well-received federal budget.
Selling was across the board on Friday with financial stocks falling the most. Housing Development Finance Corp and HDFC Bank were the top two drags on the Nifty, slipping 2.7% each.
Overnight, U.S. Treasury yields vaulted to their highest since the pandemic began, sending MSCI’s broadest index of Asia-Pacific shares outside Japan 2.4% lower on Friday.
On Thursday, the US 10-year yield climbed to 1.614 per cent -- the highest in a year. That is seen as a negative for emerging markets like India, which have been a major beneficiary of foreign inflows of late.
“There is nervousness due to rising yields. The overnight jump is a fresh wound and we are seeing a knee-jerk reaction,” said Rusmik Oza, head of fundamental research at Kotak Securities.
In Mumbai, a two-session rally in financial stocks was set to end, with the Nifty private bank index and the Nifty PSU bank index falling 2.9% and 2.5%, respectively.
In the last two sessions, Indian equities clocked sharp gains after overall risk appetite was boosted by dovish signals from the U.S. Federal Reserve.
Despite Friday’s fall, the private bank index was set to finish February more than 13% higher.
The Nifty metal index paused a week-long rally to fall 0.4%. After shedding 5.4% in January, the index was set to close the month more than 27% higher amid a rise in copper prices.