Dalal Street Corner: Investors poorer by more than 6lakh crore amid sell-off in IT, metal stocks; what should investors do on Friday?

The Indian markets witnessed multi-corner profit booking amid fears of rate hike tightening by central banks in view of inflation. Except for ITC, Dr Reddy's and PowerGrid, all stocks declined in Nifty50 and the Sensex. Though the sell-off was visible in all sectors and markets, it was Nifty IT that led the drag on Thursday. Nifty IT declined 5.74% as HCL Tech, Wipro, Infosys, TCS and Tech Mahindra were top losers on the benchmark indices. Decline in IT stocks came after global brokerage JP Morgan downgraded the sector to "underweight". 

Apart from the IT index, Nifty Metal and Media declined nearly four per cent each as, except FMCG Index, all other indices corrected more than 2 per cent each on a single day.  

Benchmarks Nifty50 and the Sensex dropped 2.6% each as they closed near 15,800 and 52,800 respectively. 

"Nifty fell towards the previous swing low on the back of a gap down start. The trend has turned negative as the Nifty fell below 16000. Immediate support is seen at 15671. Below 15671, further correction towards 15400 looks possible. On the higher end, resistance is placed at 16000," said Rupak De, Senior Technical Analyst at LKP Securities.  

Meanwhile, the massive sell-off in the market left investors poorer by more than 6 lakh crore. The market capitalisation of BSE-listed companies tumbled from Rs 2,55,77,445.81lakh crore on Wednesday to Rs 2,49,06,394.08 lakh crore on Thursday, a decline of a whooping 6.6lakh crore.  

Besides, of the 3447 stocks that traded on the BSE, as many as 87 stocks touched 52-week low and 2482 stocks declined against 49 stocks scaling fresh highs and mere 845 advancing.  

Decoding the today's marklet session, Vinod Nair, Head of Research at Geojit Financial Services, said, "the recent earnings reported by the US retailers reflected the heat of high retail inflation, resulting in a rout in Wall Street. Persistent offloading by foreign investors along with mounting fears of an economic slowdown wreaked havoc in the domestic market." 

In this highly volatile market, investors can focus on sectors like FMCG, Pharma, Capital goods and manufacturing whose valuations are moderate and reasonable on a long-term basis, suggested the expert. 

The domestic market has resumed a downtrend taking cues from our global counterparts, U.S. markets specifically, said Ajit Mishra, vice president, research at Religare Broking.