Investors lose Rs 6.71 lakh crore as sensex falls 1,416 points amid weak global signals

NEW DELHI: Stock indices posted their biggest drop in 2 months on Thursday following an extremely weak trend in global markets.
The 30-stock BSE index fell 1,416 points, or 2.61 percent, to close at 52,792. While the broader NSE Nifty shed 431 points or 2.65 percent at 15,809.
The IT and metal index were the hardest hit with Wipro, HCL Tech, Infosys, TCS and Tech Mahindra the biggest losers in the sensex pack, falling as much as 6.21 percent.

ITC, Dr Reddy’s and Power Grid were the only stocks to finish in the green.
On the NSE platform all sub-indices also ended lower with Nifty IT, Metal, Media falling as much as 5.74 percent.

Investors lost Rs 6.71 lakh crore in the session on Thursday, with the market capitalization of all BSE-listed companies falling to Rs 2,49,06,394.08 crore.
In the broader market, the mid-cap BSE gauge lost 2.66 percent and the small-cap index declined 2.29 percent.
All BSE sector indices finished lower, with IT falling the most at 5.25 percent, followed by teck (5.11 percent), metal (4.23 percent), telecoms (3.46 percent ) and basic materials (2.81 percent).
As many as 2,482 shares fell, while 845 advanced and 120 remained unchanged.
These are the main reasons for today’s drop:
* Weak global signals
National indices tracked weak trends in global markets as investors dumped riskier assets on fears rising inflation will hurt corporate profits and trigger an economic slowdown.
Markets globally have also been pressured by the conflict between Russia and Ukraine and the supply chain crisis that has been exacerbated by China’s zero covid policy.
Despite a brief recovery earlier this week, both BSE and NSE are down nearly 7 percent so far this month.
“The domestic market has resumed a downtrend following the lead of our global counterparts, specifically the US markets,” Ajit Mishra, vice president of research at Religare Broking, told Reuters news agency.
He cited expectations of aggressive monetary policy tightening to combat unruly price pressures as a drag on confidence.
Except for Shanghai, other Asian markets also closed lower, with Seoul, Hong Kong and Tokyo closing in the red.
US stock markets closed in the red on Wednesday.
“US markets experienced the worst sell-off since June 2020 as inflation fears loom,” Mohit Nigam, Head – PMS, Hem Securities, told PTI.
* FIIs continue to sell
Continued sales by foreign investors dampened investor confidence.
Overseas institutional investors unloaded shares worth a net worth of Rs 1,254.64 crore on Wednesday, according to stock exchange data.
“Another main reason for the pessimism can be attributed to the incessant selling of the FII field,” Prashanth Tapse, VP (research) at Mehta Equities Ltd, told PTI.

* Rupee hits another low
The rupee’s sinking to another record low against the US dollar added to the woes.
The rupee extended losses and fell 10 paise to close at a record low of 77.72 (provisional) against the US dollar on Thursday, weighed down by a negative trend in domestic stocks and continued outflows of foreign funds.

In the interbank foreign exchange market, the rupee opened lower at 77.72 against the dollar and finally closed the day at 77.72, 10 paise lower than its previous close.
“The rupee consolidated in a tight range despite a strong sell-off in domestic and global equities. The dollar also pulled back from higher levels after economic data released by the US.
* Deteriorating macroeconomic sentiments
Concerns about rising inflation that have led central banks around the world to opt for policy rate hikes have spooked investor confidence.

“Deteriorating macro sentiments, such as rising inflation, recession fears and the prospect of the Federal Reserve becoming even more aggressive, will continue to keep benchmarks on edge.
The Federal Reserve is trying to blunt the impact of the highest inflation in four decades by raising interest rates. Many other central banks are on a similar path.
* Wall street route
US stock markets plunged more than 4 percent on Wednesday after retail giants Target and Walmart released dovish numbers, reflecting the continuing impact of runaway inflation on consumer spending.
“Recent earnings reported by US retailers reflected the heat of high retail inflation, resulting in a Wall Street crash. Persistent unloading by foreign investors coupled with growing fears of an economic slowdown wreaked havoc in the domestic market,” Vinod Nair, Director of Research at Geojit Financial Services told PTI.
On Wednesday, the Dow Jones Industrial Average sank more than 1,100 points, or 3.6 percent. The S&P 500 had its biggest drop in nearly two years, shedding 4 percent, and the tech-heavy Nasdaq fell 4.7 percent.
The benchmark index is now down more than 18 percent from the all-time high it reached earlier in the year. That’s just shy of the 20 percent drop that’s considered a bear market.
(With contributions from agencies)

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