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Indian market snapped its eight-day winning streak with Sensex erasing over the 60,000-mark on Friday. The benchmark Nifty 50 also faced a deep bearish tone in its performance. Markets dipped due to a broad-based selloff across sectoral indices along with a steep correction in heavyweights amidst weak global cues as US Fed's hawkish comments took a toll on broader sentiments. Due to the downturn in the equity market, investors lost nearly 2.75 lakh crore in wealth in a single day on Dalal Street.

Sensex closed at 59,646.15 lower by 651.85 points or 1.08%. The benchmark had touched an intraday high and low of 60,411.20 and 59,474.57 respectively earlier today.

Broad-based selling pressure was seen in 30 major stocks with heavyweights like IndusInd Bank, Bajaj twins, Tata Steel, SBI, Maruti Suzuki, Reliance Industries, and HUL among major draggers. L&T outperformed its counterparts and benchmarks - and emerged as the top gainer.

Banking, auto, consumer durables, metal, and oil & gas indexes were the worst hit. On the broader market, large-caps and midcaps weighed on the performance.

Following the above, nearly 2.75 lakh crore of wealth was wiped out of investors on D-Street. On Friday, BSE market cap stood at 2,77,77,931.64 crore lower than 2,80,52,760.91 crore of Thursday - resulting in decline of 2,74,829.27 crore in wealth. From August 10 to August 18, investors' wealth rose more than 8.08 lakh crore before correcting on August 19.

As of August 19, 2022, RIL the most valued company, has a market cap of over 17.68 lakh crore, while TCS follows with a valuation of nearly 12.39 lakh crore, and HDFC Bank at 8.3 lakh crore. Infosys and HUL have a market cap of 6.72 lakh crore and 6.2 lakh crore.

Other major companies market cap is - ICICI Bank at 6.06 lakh crore, SBI at 4.64 lakh crore, HDFC at 4.47 lakh crore, Bajaj Finance at 4.42 lakh crore, and LIC at 4.34 lakh crore. These companies are among the top 10 most valued on BSE in terms of market cap.

Meanwhile, the Nifty 50 closed at 17,758.45 down by 198.05 points or 1.1%. The benchmark had clocked an intraday high and low of 17,992.20 and 17,710.75 respectively. Bank Nifty dipped over 670 points.

On overall market performance, Vinod Nair, Head of Research at Geojit Financial Services, "Profit booking amid weak global cues impacted domestic indices as concerns about interest rate hikes hung over the markets. Additionally, the recent rally of the dollar index and FIIs turning net sellers have surprised bulls. Broad-based selling was witnessed with the index heavyweights dragging the index further down."

Further, at the interbank forex market, the Indian rupee closed the holiday-shortened week in lower terms against the US dollar. US Federal Reserve's hawkish comments bolstered the greenback which was already firm against a basket of currencies. Investors worry over the economic slowdown hung over the market. The rupee closed at 79.7750 on Friday compared to its previous closing where the local unit was 79.6725 against the dollar.

Foreign funds inflow in the Indian market continued to remain strong in August. In 19 days of this month, FPIs have pumped in a massive 44,481 crore in the equities market, which is the highest buying year-to-date. FPIs were net sellers in the first six months of FY22. Due to the latest investments, the overall outflow in FPIs has moderated to 1,67,888 crore year-to-date.

Market outlook

Hemant Kanawala, Senior Executive Vice President & Head Equity, Kotak Mahindra Life Insurance Company said, “Overall Monsoon is progressing well (~9.5% above normal, cumulatively), with some spatial weakness in Eastern India. While sowing progress has been relatively weak which may impact crop output, India’s food stocks remain healthy which in turn will help keep food inflation in check."

He added, "On the other hand, the recently concluded earnings season saw healthy sales growth, with some pressure on profitability arising from high energy prices. Owing to recent correction in crude prices, pressure on margins should ease off over next couple of quarters."

Going forward, he said, "all eyes will remain on domestic recovery. Upcoming festive season demand is something markets will watch out for. The festival season demand is expected to be buoyant as this is the first normal festival season post-COVID-19 and rural segment may see buoyancy on back of strong monsoon".

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