Mumbai: India’s stock market crashed as the BSE Sensex fell over 1,414 points (or 1.90 percent) amidst panic selling across the sectors as foreign investors continue to pull out and Trump’s new tariff announcements fuelling a global trade war.
The investors, according to initial estimates, lost approximately Rs 9 lakh crore of wealth or market capitalization of the listed companies in a single day.
The market opened on bearish note with BSE Sensex losing 411 points within minutes of opening and tanked 1,471 points during the day before closing at 73,198.10 down 1,414.33 points from its previous close. The National Stock Exchange (NSE) slid 420.35 points at 22,124.70.
Persistent selling by foreign investors, Trump tariff policy, and concern over slowing economic growth factors badly hit the market, sources in the trading community said, adding that IT and Banking sectors were worst hit in today’s trade. This also led to panic selling by the retail investors booking huge losses across the board.
The stocks that toppled the market were Technology by 4.20 percent followed by Telecommunications by 4.09 percent, Auto by 3.84 percent, and Consumer Discretionary Goods and Services by 2.74 percent.
The Mid-cap and the small-cap declined by 2.16 percent and 2.33 percent respectively. In the 30-share BSE Sensex, shares of 29 companies ended in red while only one share that is HDFC Bank ended in green and closed 1.86 percent up at Rs 1,732.40.
The biggest losers in today’s trade were IndusInd Bank by 7.02 percent to Rs 972.80, Tech Mahindra by 6.38 percent to Rs 1486, Bharti Airtel by 5.07 per cent to Rs 1566, M&M by 4.74 percent to Rs 2596.85 and Tata Motors by 4.18 percent to Rs 621.10.
The sole gainer was HDFC Bank.
“The equity markets closed for the week deep in the red, with the frontline indexes losing altitude by 1.90% and the broader markets close to 3%. While the trend of market decline continues unabated, the larger than expected fall has been caused due to uncertainties surrounding the actual impact of the countervailing tariffs imposed by the US, and similar walls erected by other countries including China.
What has caused much of consternation is the possibility of China devaluing its currency in response to the tariffs to sustain its trade competitiveness. However, the last time around currency devaluation led to investment outflows from China. The move may have consequences for other regional currencies as well like Taiwan and South Korea, though the Rupee may be much less affected as it is still under managed floating and has a perennial trade deficit.
This trend may continue in the coming weeks too, but with persistent sell off the market correction is close to its saturation levels,” said Dr. Joseph Thomas, Head of Research, Emkay Wealth Management.
Commenting on the market crash today, Manish Jain, Chief Strategy Officer, Institution Business, Mirae Asset Capital Markets, said post Covid Nifty has seen 14-15% PE or Price compression. From 26,200 to 23,900, there had been a correction of around 13-13.5%. If GDP data doesn't improve from hereon (Nov/Dec) then market can see further correction till 22,000/22,200 (15-16% correction from top).
