Stock Market Crash Wipes Out Rs 4.59 Lakh Crore From Investors Wealth In Single Day

Investors became poorer by Rs 4.59 lakh crore on Wednesday due to a sharp fall in the equity markets where the BSE Sensex plummeted 1,628 points, dragged by bank stocks and weak global trends.

Extending its previous day's decline, the 30-share BSE Sensex tanked 1,628.01 points or 2.23% to settle at 71,500.76. During the day, it nosedived 1,699.47 points or 2.32% to 71,429.30.

The market capitalisation of BSE-listed companies eroded by Rs 4,59,327.64 crore to Rs 3,70,35,933.18 crore. In two days of market fall, investors' wealth fell by Rs 5,73,576.83 crore.

Hawkish comments by the U.S. Fed triggered a spike in yields on the U.S. 10-year bonds and the U.S. dollar index, which spooked European and Asian markets, including India. India's stock market valuations are also expensively valued compared to other global stock indices and investors would wait for more positive cues now to extend their equity exposure.

'There are challenges in the near-term such as persisting conflict in the Middle East and worries over delay in the U.S. Fed rate cut, which could dampen investors' sentiment going ahead,' said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Among the Sensex firms, HDFC Bank fell by over 8% after the company's December quarter earnings failed to impress investors.

Tata Steel, Kotak Mahindra Bank, Axis Bank, ICICI Bank, JSW Steel, Bajaj Finserv, State Bank of India and IndusInd Bank were among the other major laggards.

HCL Technologies, Tata Consultancy Services, Infosys, Tech Mahindra, Titan, Nestle and PowerGrid were the gainers.

'Domestic equities plunged amid a weak environment globally and a selloff in HDFC Bank. Banking sector took the biggest hit as Q3 results of HDFC Bank showed stagnant growth for the company. Hawkish Fed commentary, escalating tension in the Middle East, and a spike in bond yield dented investor sentiment,' said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled lower.

European markets were also trading with sharp cuts. The U.S. markets ended in negative territory on Tuesday.

In the broader market, the BSE midcap gauge fell by 1.09% and smallcap index declined 0.90%.

Among the indices, bankex tumbled 4.02%, financial services fell by 3.76%, metal (2.86%), commodities (2.31%), telecommunication (1.94%) and realty (1.47%).

IT, consumer durables and teck were the gainers.

As many as 2,510 stocks declined, while 1,301 advanced and 89 remained unchanged.