Indian Stock Market Plunges, Erasing Over Rs 4.5 Lakh Crore of Investor Wealth

On a turbulent trading day, the Indian stock market experienced a dramatic nosedive that resulted in a staggering loss of investor wealth, totaling Rs 4.59 lakh crore. The Bombay Stock Exchange (BSE) benchmark index, the Sensex, faced a severe sell-off, concluding the day's business at a significant decline.

Sharp Decline in Market Capitalisation

The overall valuation of BSE-listed companies saw a sharp cutback by Rs 4,59,327.64 crore, drawing their market capitalisation down to Rs 3,70,35,933.18 crore. This downfall marks an extension of the previous day's market slump, culminating in a two-day dip where investor wealth saw a reduction by Rs 5,73,576.83 crore.

Global Trends and Domestic Results Impact Markets

Factors contributing to the crash include hawkish signals from the U.S. Federal Reserve, leading to rising yields on U.S. bonds and strengthening of the U.S. dollar. These elements, coupled with subdued quarterly outcomes from leading banks like HDFC Bank and ongoing geopolitical tensions, have had a ripple effect across global markets, dampening investor sentiments.

The Sensex slumped by 1,628.01 points, or 2.23%, closing at 71,500.76, while during intra-day trade it had plunged even deeper. Major banking stocks, such as HDFC Bank, which dropped over 8% post-earnings, along with Tata Steel, Kotak Mahindra Bank, and several others contributed to the downturn. Technology and consumer goods sectors, however, saw some stocks like HCL Technologies and Nestle making gains despite the wider market sell-off.

Broader Market and Sectoral Indices React

Falling in line with the primary index, the broader BSE midcap and smallcap indices also faced declines. Banking and financial services indices took the hardest hit, whereas IT and consumer durable sectors were among the few that witnessed gains amidst the widespread losses.

As investors reacted to the tumultuous market conditions, a total of 2,510 stocks ended in the red, in contrast to 1,301 that managed to stay in the green. Stagnant growth from banking sector quarter results and other macroeconomic concerns seemed to cast a shadow on market optimism.

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