Investors poorer by over Rs 6.50 lakh crore as Sensex sinks over 1.50%

Stock market investors' wealth eroded by over Rs 6.50 lakh crore on Monday amid a sharp fall in equities. The 30-share BSE Sensex tanked over 950 points or over 1.64 per cent to settle at 57,145.22. During the day, it tumbled over 1,000 points or nearly 2 per cent to 57,038.24. The NSE Nifty fell 311.05 points or 1.80 per cent to end at 17,016.30.

Among the 30-share Sensex pack, Maruti, Tata Steel, ITC, Bajaj Finance, Axis Bank, NTPC, Mahindra & Mahindra and IndusInd Bank were the major laggards. HCL Technologies, Infosys, Asian Paints, TCS, UltraTech Cement, Wipro and Nestle were the gainers.

The market capitalisation of the BSE-listed firms plummeted by Rs 6,52,469.12 to Rs 2,70,12,097.67, according to the BSE website. The market capitalisation of the BSE-listed firms was Rs 2,76,64,566.79 crore on Friday.

Today is the fourth day of decline for the equity market. In the last four sessions (September 21, 22, 23 and 26), the BSE benchmark has fallen by over 2700 points or around 4.30 per cent. In the last three days, investors' wealth was eroded by Rs 6,77,646.74 crore.

Key factors that affected the markets today-

Global cues

The global markets have been trading volatile since the aggressive rate hike of 75 basis points (bps) by the US Federal Reserve earlier last week. On Friday, the weakness persisted in the US market as all major indices slipped over 1.50%. Dow Jones, Nasdaq, and S&P 500 ended lower by 1.6%, 1.8 and 1.7%, respectively. Meanwhile, Asian markets too were trading lower as the Japanese Nikkei 225 declined 2.6%, Hang Seng Index fell 0.5% and the Chinese Shanghai Composite dropped 0.6% around 12 pm on Monday. SGX Nifty took a hit of 300 points to trade near the 17,000-mark.  

Weakness in Rupee

The rupee declined in early trade on Monday to hit an all-time low of 81.52 against the US dollar, apparently due to the strengthening of the American currency and risk-averse sentiment among investors.

Inflation

S&P Global Ratings on Monday said inflation is likely to remain above RBI's upper tolerance threshold of 6 per cent till the end of 2022. It projected India's economic growth at 7.3 per cent in the current fiscal with downside risks. Earlier this month, Fitch Ratings slashed the growth estimate to 7 per cent for the current fiscal from 7.8 per cent pegged earlier. India Ratings & Research too had reduced its projections to 6.9 per cent from 7 per cent earlier.

Trend reversal in FIIs data

The FIIs have turned into net sellers in the Indian cash market with a negative flow of Rs 2,445.82 crore so far as on September 23. It has remained a net seller in the past three days and sold equities worth Rs 461.04 crore on 21st September, Rs 2,509.55 crore on 22nd September Rs 2,899.68 crore during Friday's sell-off, showed the exchanges data. FIIs have invested over Rs 50,000 crore in August.  

RBI monetary policy

After the US Federal Reserve hiked the interest rates, all eyes are on the Reserve Bank of India (RBI), which is slated to hold the monetary policy later this week. Anticipating a steep hike, the domestic market crumbled amid weak global cues on Monday.