Investors poorer by nearly ₹18.75 lakh cr in 5 trading sessions. What’s next

Market


A widespread selloff dragged benchmarks Sensex and Nifty 50 on Thursday tracking weak global cues as sentiments soured after US inflation stayed near four-decades highs. At home, all broader markets and sectoral indices witnessed selling pressure. Sensex and Nifty 50 both settled with a drop of more than 2%. Markets have been stubbornly sliding down since the start of this month due to various factors making investors lose hefty. In the last five trading sessions, investors have got poorer by nearly 18.75 lakh crore on Dalal Street alone.

Sensex today closed at 52,930.31 down by 1158.08 points or 2.14%. Except for Wipro, the remaining stocks listed on this benchmark were in red with IndusInd Bank, HDFC twins, Bajaj twins, Tata Steel, Axis Bank, Titan, and L&T being top underperformers.

On BSE, the broader markets slumped between 2% to 3% in just one day. All sectoral indices also nosedived by 1% to 4.5%. Banking stocks were top bears, while free falls were also recorded in consumer durables, metals, capital goods, and auto stocks.

In the last five trading sessions from May 6th to May 12th, investors’ wealth has been wiped out significantly on BSE.

The last time markets were in green was on May 5. Notably, this is the only day, markets saw green, remaining so far in May bears have taken control. 

BSE market cap stands at 2,40,90,199.39 crore after today’s closing price of Sensex. This has declined by 18,74,689.98 crore from 2,59,64,889.37 crore on May 5th.

Sensex has also dipped by 2,771.92 points from May 5 to May 12. Overall, in the last five sessions, the benchmark plummeted by more than 5%. Meanwhile, the Nifty 50 dropped by nearly 875 points or 5.5% during these days. 

Nifty 50 ended at 15,808 lower by 359.10 points or 2.22% today.

Ajit Mishra, VP – Research, Religare Broking said, “Markets plunged sharply lower and lost over 2%, pressurised by weak global cues. The US inflation data, which came in closer to 4-decade high, dented sentiment across the globe including India. The benchmark opened a gap down and gradually drifted lower as the day progressed. Finally, the Nifty index ended at 15,808; down by 2.2%. The selling pressure was widespread and all the sectoral indices ended lower. The broader indices too lost nearly 2% each.”

Vinod Nair, Head of Research at Geojit Financial Services said, “Yesterday’s release of higher-than-expected US CPI data suggests that the inflationary pressure will persist in the near term. However, it is presumed to have peaked and will gradually decline in-line with the ongoing fall in crude and other commodity prices, and slowdown in the economy. The Fed surprised the market with a hawkish stance, limiting liquidity, which limits further setbacks in the future. We can expect the market to stabilize as FIIs may reduce selling factoring inflation & Fed policy”

In its technical review, Rupak De, Senior Technical Analyst at LKP Securities said, “Nifty continues its downwards journey as the benchmark Index has closed sharply in the red for the day. However, the Nifty has reached near the previous swing low on the daily chart. Bounce may come in the market if the Nifty manages to hold above the previous swing low of 15671. Failure to maintain above 15650 may trigger a further correction on the flip side”

For tomorrow’s trading, Ajit said, “Markets would first react to the macro-economic date outcome (IIP and CPI) in early trade on Friday. This data is critical ahead of the next MPC meet, which is scheduled in June. Besides, the performance of the global markets will also be in focus. We recommend maintaining a bearish stance in Nifty until it crosses the 16,100 zones decisively. On the downside, a breakdown below 15,650 would pave the way for 15,400. Participants should align positions according to the trend and focus more on position management.”

India’s consumer price index (CPI) inflation has reached at eight years high of 7.79% in April – surpassing RBI’s upper target range of 6% for the fourth consecutive month.

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