NEW DELHI: Investors faced a severe blow on Monday as the stock market tumbled, amid concerns over third quarter results and foreign fund withdrawal, wiping out Rs 10.98 lakh crore in wealth.
Benchmark indices
The 30-share BSE benchmark Sensex plunged 1,258.12 points, or 1.59 per cent, closing at 77,964.99, below the crucial 78,000 mark. Its lowest point during the day touched 77,781.62, falling 1,441.49 points, or 1.81 per cent.
NSE Nifty was also affected, dropping 388.70 points, or 1.62 per cent, to end at 23,616.05.
The M-cap of all BSE-listed companies plunged to Rs 4,38,79,406.58 crore ($ 5.11 trillion), marking a sharp decrease of Rs 10,98,723.54 crore.
Bloodbath at the Dalal street
Among the hardest-hit stocks in the blue-chip index were Tata Steel, NTPC, Kotak Mahindra Bank, Power Grid, Zomato, Adani Ports, IndusInd Bank, Asian Paints, ITC, and Reliance Industries.
Titan, HCL Tech, and Sun Pharma emerged green in an otherwise crashed market.
The sharp decline, in which Nifty and Bank Nifty dipped below their 200-day average streak, was attributed to a combination of factors, including rising foreign institutional investor (FII) selling and concerns over the upcoming third-quarter earnings season.
Smaller stocks also faced severe pressure, with the BSE smallcap index plummeting by 3.17 per cent and the midcap index falling by 2.44 per cent.
All BSE sectoral indices closed in the red, with utilities suffering the most, falling by 4.16 per cent, followed by power (down 3.73 per cent), services (down 3.45 per cent), metal (down 3.15 per cent), oil & gas (down 3.15 per cent), energy (down 3.03 per cent), industrials (down 2.97 per cent), and commodities (down 2.74 per cent).
Market was mostly negative, with 3,474 stocks declining and only 656 climbed, while 114 remained unchanged on the index.
Factors driving the market bearish
FII selling
Siddhartha Khemka, head of research at Motilal Oswal Financial Services, told news agency PTI, “Indian equities faced intense selling pressure amid concerns regarding the outbreak of HMP virus and sharp fall in banking stocks post lacklustre quarterly updates.”
On Friday, FIIs offloaded equities worth Rs 4,227.25 crore, resuming their selling after a brief pause, according to exchange data.
Q3 earnings
Vinod Nair, head of research at Geojit Financial Services, said ” The initial Q3 consensus earnings estimate suggests a potential gradual recovery in domestic corporate earnings, which could explain the domestic market’s underperformance compared to global markets led by premium valuation.”
Global circumstances
Markets are currently facing volatility due to uncertainties surrounding new US economic policies, the Fed’s stance on future rate cuts, potential upward revision for CY25 inflation, and a strong dollar, all of which are negatively impacting market sentiment.
HMPV virus
Concerns over the Human Metapneumovirus (HMPV) also appear to be a primary catalyst for a sharp sell-off in the domestic market.
Santosh Meena, head of research at Swastika Investmart said, “Additionally, fears related to the new HMPV have added to the bearish sentiment, triggering fresh rounds of selling after the recent counter-trend pullback rally.”
