Investors wipe out Rs 7.50 lakh crore as Sensex, Nifty fall over 3% each
Domestic investors lost over Rs 7.50 lakh crore on Monday as sharp fall in Sensex and Nifty on Monday amid heavy selling in global equities. Today’s fall in the indices is the sixth session in seven sessions.
According to BSE data, the market capitalization of all listed companies fell by Rs 7.50 lakh crore to Rs 244.26 lakh crore in the afternoon session, from Rs 251.84 lakh crore on Friday. As per the data on BSE website at 2:20 pm, the market capitalization of all BSE listed companies currently stands at Rs 2,44,48,771.16.
77 shares hit 52-week high on BSE today. As per BSE data at 1:30 pm, while 204 stocks were closed in the upper circuit, 310 stocks hit the lower circuit.
After opening the gap down, the 30-share BSE benchmark fell further as it was trading down 1,568 points or 2.89% at 52,735 at 1:30 pm. Similarly, the Nifty 50 index was trading at 15,754, down 443 points or 2.76%. Nifty Midcap also lost more than 2.50 per cent, while Nifty Smallcap lost 3.45 per cent.
Earlier on Friday, Wall Street was sharply lower after inflation data scared investors. According to data released last week, inflation in the US has reached 8.60 percent at the age of 40. The high rate of inflation has investors concerned that the Federal Reserve may aggressively raise key rates.
Banking, IT stocks fall
Banking, financial services and IT stocks were the biggest hit in today’s session. Bajaj Finserv, Bajaj Finance, ICICI Bank, State Bank of India, Kotak Mahindra Bank, Tech Mahindra and IndusInd Bank emerged as the major laggards. Weakness in index major Reliance Industries also dragged the market.
Bajaj Finserv fell 6 per cent and Bajaj Finance 5.27 per cent to Rs 5369.10. IndusInd Bank closed at Rs 869.70, down 5.32 per cent. ICICI Bank suffered a loss of around five per cent. State Bank of India closed at Rs 445.60, down 3.51 per cent. There was heavy selling pressure in IT stocks. TCS fell nearly four per cent. Tech Mahindra was trading with a decline of 4.37 percent. Infosys was down 3.53 per cent.
Nifty next at 15,200?
Ravi Singhal, Vice Chairman, GCL Securities said, “After the bloodbath in the US market on Friday, we are seeing the same trend in the Indian market. This is mainly due to the CPI data of the US and the uptick in COVID in China.” “Now the market feels that rates may go up further… Still, there is some pain left for us. Nifty may touch 15,200 in the coming weeks,” he said.
“India VIX is up around 13 per cent while all sectors are in the deep red. Investors should book small profits in their recent investments if they are done on a swing basis and avoid heavy buying instead. Some small amounts can be bought on each downtrend. It is good to have value stocks and cash reserves during this time as every downtrend can be seen as an investment opportunity,” said Manoj Dalmiya, Founder and Director, Proficient Equities.
Ravi Singh, Vice President and Head of Research, Share India, said investors are cautious ahead of the central banks meeting to be held this week. Nifty may continue selling near 15,500 level. However, 15,500 has strong support and “we may see a bounce back in the index from that level”.
Right time to invest?
Rahul Shah, Co-Head of Research at Equitymaster said that as soon as the Sensex PE multiple falls below 20x, the market becomes very attractive from a 2-3 year perspective. This is the level where you can again dream of earning returns in the region of 16%-18% p.a. in the long term.
“If you buy in a market PE multiple of around 18x-20x and stick to quality names, it is highly unlikely that you will lose money over a period of 2-3 years, be it large cap or small cap. From a regional perspective, it would make sense to look at more domestic oriented sectors like auto, capital goods and the entire defense sector,” he said.
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