4-day fall evaporates Rs 12.52-trn investors’ wealth

Escalating Unrest

♦ BSE Sensex lost 1,856.21 pts or 2.79% in 4 sessions

♦ Geo-political tensions in ME impact a lot

♦ Worries over further rate hike by US Fed

♦ All the indices ended in red

Investors’ wealth eroded by Rs7.59 lakh crore on last Monday as the equity market took a heavy drubbing amid escalating tensions in the Middle East. The 30-share BSE Sensex plunged 825.74 points or 1.26 per cent to settle at 64,571.88 points. During the day, the index plummeted 894.94 points or 1.36 per cent to 64,502.68 points. This is the fourth consecutive session of decline for the benchmark index and in four days, the BSE benchmark has dropped by 1,856.21 points or 2.79 per cent. Amid weak trend in equities, the market capitalisation (mcap) of BSE-listed firms fell by Rs12,51,700.73 crore in four days of market crash to reach Rs3,11,30,724.40 crore.

On Monday alone, the market valuation of the BSE-listed companies plummeted Rs7,59,041.63 crore. “Benchmark indices witnessed severe pounding in the last hour trades as simmering geopolitical tension in the Middle East region triggered a wave of selling pressure and prompted investors to offload equity holdings.

“Investors are already worried about further interest rate hike and inflation, and with the addition of the Israel-Hamas conflict, the uncertainty has increased further and leading to weak sentiment in global equities,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities Ltd, said.

Among the Sensex firms, JSW Steel, Tata Steel, Tata Consultancy Services, Tata Motors, Wipro, IndusInd Bank, HCL Technologies, NTPC, State Bank of India and Larsen & Toubro were the major laggards. Bajaj Finance and Mahindra & Mahindra were the gainers. Global oil benchmark Brent crude climbed 0.04 per cent to $92.18 a barrel. In the broader market, the BSE smallcap gauge cracked 4.18 per cent and midcap index dropped 2.51 per cent.

“Fear of regional conflict in the Middle East and worries over more rate hikes by the US Federal Reserve for an extended period were the major cause of concern in the market. Even the earning season has been mixed so far, thus not providing resilience to the market,” Siddhartha Khemka, head (retail research) at Motilal Oswal Financial Services Ltd. All the indices ended lower, with telecommunication plunging 3.82 per cent, industrials falling 3.26 per cent, utilities (3.10 per cent), commodities (3.06 per cent), services (2.99 per cent), realty (2.84 per cent), power (2.69 per cent), consumer discretionary (2.25 per cent), IT (2.14 per cent) and oil & gas (1.88 per cent). A total of 3,196 firms declined while 638 advanced and 156 remained unchanged on the BSE.