Investors Lose ₹8.58 Lakh Crore in Stock Market Meltdown
Sectors like healthcare and IT suffered lesser damage in the market fall.
Investor wealth eroded by ₹8.58 lakh crore on Monday as a sharp spike in crude oil prices triggered heavy selling on Dalal Street, dragging the BSE’s total market capitalisation down to about ₹441.10 lakh crore.
A sharp uptick in crude oil futures above $100 per barrel triggered panic selling in the market as Brent crude futures skyrocketed to a four-year high of $119.5 per barrel. The Sensex fell 2,494.35 points or 3.16 per cent to 76,424.55 around 9.25 am, after a big gap-down opening on the likely adverse impact of high oil prices on the economy.
Nifty-50 fell by 752.65 points, touching a low of 23,697.8 intraday. Later there was partial recovery by more than one per cent as Sensex closed 1,352.74 points or 1.71 per cent down at 77,566.16 while Nifty closed 422.4 points lower at 24,028.05.
For India, the sharp move in crude prices raises concerns over higher inflation, a widening current account deficit and potential pressure on economic growth, all of which dampened market sentiment, analysts said.
Foreign portfolio investors were heavy sellers by ₹6,345.57 crore while domestic institutions were net buyers by ₹9,013.8 crore.
Sectors impacted by the sharp rise in crude oil prices included oil and gas stocks led by oil marketing companies as well as aviation, auto and paint stocks. Consumer discretionary and capital goods stocks also fell heavily.
Volatility index NSE’s India VIX rose 17.51 per cent to close at 23.36 after making a new 52-week high of 24.49 intraday, indicating a highly volatile market in the coming days.
With government bond yields rising, bank stocks too fell sharply. BSE and NSE PSU bank indices fell 3.92 per cent and 3.05 per cent respectively. The 10-year government bond yield rose to 6.76 per cent intraday.
Sectors like healthcare and IT suffered lesser damage in the market fall.
“Oil at around $115 per barrel is unlikely to sustain for long, and once prices stabilise, markets should find their footing again,” said Satish Kumar, Managing Director and Head, InCred Research Services.
“Fluctuations in crude oil prices are expected to weigh on sectors where oil is a key input cost,” said Siddhartha Khemka, Head-Research, Motilal Oswal Financial Services.
