Over ₹6.18 lakh cr of investors' wealth crumbled as Sensex crashes nearly 1,100 points

Indian markets surrendered to weak global cues amidst rising yields and the dollar index on Friday and extended their downfall. Sensex nosedived over 1,245 points and Nifty 50 plummeted more than 380 points today on a broad-based selloff across sectoral indices. Steep profit booking in IT, consumer durables, and auto stocks soured markets' moods heavily. Fears of recession due to concerns of a slowdown in major economies acted as the elephant in the room for dragging markets globally. On Dalal Street, over ₹6.18 lakh crore of investors' wealth eroded in a single day. Markets to focus on monetary policy outcomes of major central banks ahead.

Sensex plunged by 1,093.22 points or 1.82% to settle at 58,840.79. The benchmark has dived by at least 1,246.84 points in the day with an intraday low of 58,687.17.

Except for IndusInd Bank, all stocks under the Sensex index were in the red. Ultratech Cement, Tech Mahindra, Infosys, M&M, Wipro, and Nestle were top bears. However, a sharp decline in top heavyweights like TCS, Reliance Industries, HDFC, and Bajaj Finserv intensified the overall downfall.

In broader markets, Sensex Next 50 was the top laggard by slipping over 1,600 points. The midcap index dropped by nearly 2.9%, while the small-cap index dipped around 2.4% -- taking a toll on overall performance.

On BSE, in terms of sectoral indices, Consumer Durables were worst hit by shedding more than 1,008 points, while IT and Auto index dragged by plunging over 953 points and 816 points respectively.

With bears pulling indices, the market cap of BSE-listed firms contracted by ₹6,18,536.3 crore. By end of September 16, the market cap of equity firms on BSE stood at ₹2,79,68,822.06 crore.

On the previous day, the market cap of BSE-listed firms was ₹2,85,87,358.36 crore.

That said, investors' wealth on BSE dipped by over ₹6.18 lakh crore.

Meanwhile, Nifty 50 ended at 17,530.85 falling by 346.55 points or 1.94%. The 50-scrip benchmark dipped by at least 380.15 points with an intraday low of 17,497.25.

Both Sensex and Nifty 50 have dropped for the third-consecutive day in the trading week of September 12-16.

This week, Sensex has shed over 1.274 points and Nifty 50 has tumbled above 405 points. Both benchmarks have dropped more than 2% each in the current week.

Talking about market performance, Vinod Nair, Head of Research at Geojit Financial Services said, "With persistent bearish pressure from global stocks amid rising yields and dollar index, the domestic market surrendered to the global trend despite its strong decoupling scenario and encouraging macroeconomic data. Post the release of US inflation data, which showcased an MoM increase in inflation, the global market has been pricing in the likelihood of a more aggressive policy response from the Fed."

At the interbank forex market, the Indian rupee closed at 79.78 against the US dollar lower by 7 paise on the back of a strong greenback and a selloff in domestic equities.

On September 16, foreign investors (FIIs) extended their offloading in equity markets. These investors pulled out ₹3,260.05 crore in the day down by 1.9%. FIIs outflow was at ₹1,270.68 crore on September 15, and ₹1,397.51 crore on September 14 from the equity market.

In the coming week, Apurva Sheth, Head of Market Perspectives, Samco Securities said, the FOMC meeting and press conference will be the center of attention next week. Globally, Fed’s interest rate decision can trigger jitters in the markets.

Sheth added, "Given the US Fed’s hawkish stance, some people are expecting even a 100 bps rate hike. US markets already faced deep cuts when they reacted to the figures of headline CPI and core inflation for August’22. Although India has done significantly better than all the other major markets, it is expected to remain volatile."