Dalal Street Corner: Investors lose over 5 lakh cr, indices see over 2% cuts as bears tighten grip; What should investors do on Friday?

The sharp correction left investors poorer by more than 5 lakh crore on Thursday as benchmarks ended with deep cuts of more than 2% amid weak global cues and high volatility. As per the exchange data, the market capitalization of BSE listed companies dropped to Rs 2,41,03,944.87 lakh crore on Thursday from Rs 2,46,31,990.38 lakh crore on Wednesday.  

As for stocks, as many as 330 stocks hit 52-week lows and 531 touched the lower circuit on the BSE. Of 3,447 stocks traded on the BSE on Thursday, 2614 declined, 86 remained unchanged, while only 747 stocks advanced. 

In the broader market, Nifty50 ended around 15,800, while midcap and small cap dropped 2.3% and 1.8% respectively. Among sectoral indices, Nifty PSU Bank and Metal declined 5.3% and 3.7% respectively as all sectors slid in the red.  

Here is what experts say about today's correction in the market and expected trends going forward.  

Vinod Nair, Head of Research at Geojit Financial Services. 

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. 

Vineet Bagri, Managing Partner- TrustPlutus Wealth   

Overnight western markets gave up their early gains due to persistent selling in tech, leading to a broader sell-off. The inflation print was higher than expected, fueling the call for more aggressive rate hikes and weak global growth in CY23. And with the dollar index strengthening to 104, FIIs continue selling the EM space.   

Also, DII buying is acting like a much-needed shock absorber in our market. However early indicators suggest that retail investors have also started taking money off the table.   

Although the macro indicators are weakening, we are seeing some green shoots too, especially the recent cool off in commodities like aluminum, copper, zinc, steel and iron ore.  

However, this is a welcome relief as India is not a commodity export driven market. Although expected global GDP growth rates for CY 22/23 are being lowered, India is perhaps the only major economy expected to grow at an average 7% over the next two years.  

Thus, we believe that once the selling pressure abates and commodity prices/inflation start cooling off, Indian market should see a strong bounce back. 

S Ranganathan, Head of Research at LKP securities.  

Benchmark Indices wilted 2.5% in afternoon trade on the back of weak global cues as Investors booked gains unable to set right the puzzle around Oil, War, Currency, Inflation & Interest rates.  

Expectations of high CPI for April coupled with margin pressures seen in fourth quarter earnings is further accentuating the selling pressure in equities which was evident in the number of stocks hitting yearly lows today as the Sensex broke 53K with all sectoral indices ending deeply in the red.  

With safe-haven flows pushing the dollar index to 20-year highs, investors now seem to be pinning their hopes on a resolution to the conflict at the earliest. 

Santosh Meena, Head of Research, Swastika Investmart Ltd.  

The current market is falling relentlessly and has breached the 16000 mark today. This market is not meant for the faint-hearted as further fall is possible and there will be no respite on the volatility front in the short term.  

Investors, especially the ones that have entered during the post covid bull market, have to taper down their expectations and need to work hard to achieve a reasonable gain.  

Gone are the days when any stock would rise 10% in a week or 30% in a month or 5 times in a year!! However, the current dip provides a good opportunity to add stocks and India is currently in a better position in terms of economic strength compared to its peers in the medium to long term.  

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)