Dalal St In Tailspin As Inflation Shocks

Mumbai: BSE benchmark Sensex plunged 984 points to close at a more than four-month low on Wednesday, following heavy selling in banking, auto and capital goods shares amid retail inflation soaring to a 14-month high in October and unabated foreign fund outflows.

The BSE Sensex slid to 77,690.95, down by 984.23 points or 1.25 per cent, marking its second straight day of losses. During the day, it slumped 1,141.88 points or 1.45 per cent to 77,533.30. Registering its fifth day of decline, the NSE Nifty tumbled 324.40 points or 1.36 per cent to 23,559.05, a level not seen since June 24, 2024.

“Relentless selling by FIIs amid weak corporate earnings and a sharp surge in domestic inflation to a 14-month high have further impacted investor sentiment, dashing hopes for a near-term rate cut by the RBI. Markets are jittery about future US policy actions, including trade-related implications for the world economy, which is reflected in a stronger US dollar and rising bond yields,” said Vinod Nair, Head (Research), Geojit Financial Services.

Mid and small-cap stocks were the worst hit, while the financials and auto sectors also showed significant weakness.

“Markets extended their corrective phase, declining by nearly one and a half per cent, continuing the existing downward trend,” added Ajit Mishra, Sr V-P (research), Religare Broking Ltd. The BSE smallcap gauge tanked 3.08 per cent and midcap slumped 2.56 per cent. All sectoral indices ended lower. Realty tumbled the most by 3.23 per cent, followed by industrials (2.95 per cent), capital goods (2.72 per cent), services (2.54 per cent), metal (2.54 per cent) and commodities (2.45 per cent). A total of 3,299 stocks declined while 670 advanced and 98 remained unchanged on the BSE.

From the 30-share Sensex pack, Mahindra & Mahindra, Tata Steel, Adani Ports, JSW Steel, IndusInd Bank, Reliance Industries, HDFC Bank and Kotak Mahindra Bank were the biggest laggards. Tata Motors, NTPC, Hindustan Unilever, Asian Paints and Infosys were the gainers.

The latest data showed retail inflation breached the Reserve Bank’s upper tolerance level, soaring to a 14-month high of 6.21 per cent in October, mainly on account of rising food prices. Foreign Institutional Investors (FIIs) offloaded equities worth Rs3,024.31 crore on Tuesday, according to exchange data.

Investors poorer by Rs 13 lakh cr in 2 sessions

The market crash on Wednesday wiped out investors’ wealth to the tune of Rs7.78 lakh crore. Equity investors suffered an erosion of Rs13 lakh crore in market valuation in two days of crash in the BSE benchmark Sensex which lost over two per cent during this period. The market capitalisation (mcap) of BSE-listed companies eroded by Rs13,07,898.47 crore to Rs4,29,46,189.52 cr ($5.09 trn) in two days.