Meta's share price crash: Stock fall not 'surprising', focus on cyclical stocks in India, says market expert Ajay Bagga

Facebook`s owner Meta Platforms' stock market value tanked by more than $230 billion, in a record daily loss for a US firm. The slump in stock prices of Meta saw Mark Zuckerberg losing a whopping $29 billion in net worth on Thursday.  

Decoding this fall and how it impacts the equity markets of the US and Indian, market expert Ajay Bagga one should not read much into this as it was an attempt to bring down the soaring valuations. "It appears big mainly because of the sheer size and scale of the US market. In the last five years, the US markets have witnessed five companies losing over a $1 billion in a single day. Microsoft has also fallen by $178 billion in March 2020. Facebook too fell by $125 billion in one day in 2018 when its user base witnessed decline. Amazon, Tesla had also fallen more than $100billion last year. It is not surprising, however, this is the biggest fall posted by a company in the history of US markets in a single day," said the expert.  

See Zee Business Live TV Streaming Below:

Interestingly this fall of approximately $250billion is more than the 90% of S&P 500 companies. Since the market is stretched and the top 10 companies command major chunk of the market cap, of the 500 points fall seen by Nasdaq on Thursday, around 200 points was contributed by Facebook alone, said Bagga.  

"It is good that a major correction was seen on a single day and an attempt was made to bring Facebook at the right valuation. Besides, Amazon posted good numbers and if it continues to perform, it can compensate for those 200 points fall by Meta. There will be volatility due to a rise in inflation and central banks resorting to tightening and their plans to increase rates. The markets will remain earnings driven. This is a rotation from growth to valuation," he said.

Meta`s stock fell 26%, erasing more than $200 billion in the biggest ever single-day market value wipeout for a U.S. company. That pulled down founder and Chief Executive Officer Zuckerberg`s net worth to $85 billion, according to Forbes. 

नतीजों के बाद #Meta टूटा, #Amazon उछला,क्या है वजह?#Facebook के वैल्यूएशन गिरने से बाजार पर कैसा असर?
फेसबुक मैनेजमेंट से क्या हुई गलती?
भारतीय निवेशक किन शेयरों को चुनें?
जरूर देखिए ये वीडियो

देखिए #ZeeBusiness LIVE https://t.co/QTsT7fZ0ea
@Ajay_Bagga @deepdbhandari pic.twitter.com/XjGV5f84M9

— Zee Business (@ZeeBusiness) February 4, 2022

Zuckerberg owns about 12.8% of the tech behemoth formerly known as Facebook.  

Speaking of Indian market, Bagga said cyclic stocks will perform in domestic markets amid economic recovery. "In India, one has to focus on cyclical stocks and asset allocation, which should not be overstretched," the expert added.