In a significant downturn for equity investors, the BSE Sensex took a steep fall, causing a loss of Rs 8.50 lakh crore on Tuesday. The benchmark index, BSE Sensex, plummeted by 1,053.10 points, closing below the 71,000 level. Key contributors to this decline were heavyweight stocks like HDFC Bank, Reliance Industries, and SBI within the 30-share index.
The overall market capitalization of BSE-listed companies suffered a substantial hit, diminishing by Rs 8,50,820.81 crore to reach Rs 3,65,97,915.97 crore, according to a PTI report. This marks a notable decrease from the market capitalization of Rs 3,74,48,736.78 crore observed on January 20.
Factors Behind the Market Downturn
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd, attributed the benchmark index’s decline to a significant sell-off and profit booking. Initially starting positively, domestic equities turned red due to weak global cues and a mixed set of earnings releases. Additionally, escalating hostilities in the Red Sea and prolonged disruptions caused by Houthi attacks pose risks to South Asian economies, including India. The decision by the Bank of Japan to keep interest rates unchanged, following China’s lead, also contributed to the overall market sentiment.
Anticipated Market Trends and Global Factors
Investors are anxiously awaiting the release of US GDP data and the European Central Bank rate decision. However, with just three trading days in the week for Indian stock markets, it is expected that the market will consolidate and potentially experience further drops until fresh positive triggers emerge. The weak global cues and mixed earnings reports contribute to this cautious outlook.
Stock Performance and Sectoral Impact
Among the Sensex firms, IndusInd Bank faced the most substantial loss, falling by 6.13%, followed by SBI (3.99%), Hindustan Unilever (3.82%), Axis Bank (3.41%), and HDFC Bank (3.23%). The midcap and smallcap indices witnessed more significant declines compared to the benchmarks, with the S&P BSE MidCap falling by 2.95%, and the midcap index settling 2.79% lower.
Most sectoral indices, except healthcare, ended with losses. Realty and services indices recorded the highest decline of 5.46% and 4.06%, respectively. Notably, the healthcare index rose by 1.02%. In terms of stock performance, 2,991 stocks declined, while 938 advanced, and 138 remained unchanged.
The market is closely watching for fresh developments, and investors remain cautious amid the current economic uncertainties.
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