In a startling turn of events, the Indian stock market experienced a significant downturn on Wednesday, sending shockwaves throughout the investor community. The Sensex, representing the Bombay Stock Exchange (BSE), plunged by 906 points, while the Nifty, tracking the National Stock Exchange (NSE), dipped below the crucial 22,000 mark. This sudden decline sparked concerns over various economic factors, including inflation and geopolitical tensions, leading to heightened uncertainty and a massive sell-off.
Factors Contributing to the Downturn:
Analysts attributed the market's negative sentiment to deep losses in utility, energy, and metal stocks, exacerbated by recent selling activities by foreign investors.
Market Performance:
The Sensex plummeted by 906.07 points or 1.23 per cent to settle at 72,761.89, while the broader Nifty index experienced a sharp decline of 338 points or 1.51 per cent, closing at 21,997.70.
Top Losers and Gainers:
Among Sensex stocks, Power Grid emerged as the biggest loser, with a decline of over 7 per cent. On the other hand, ITC, ICICI Bank, Kotak Mahindra Bank, Nestle, Bajaj Finance, and HDFC Bank were among the few gainers.
Expert Insights:
Experts highlighted the unfavorable risk-reward balance in mid and small-cap stocks, exacerbated by prolonged premium valuations. He suggested that FMCG and contrarian plays like gold offer some refuge amidst the downturn.
Broader Market Performance:
The BSE smallcap gauge witnessed a significant decline of 5.11 per cent, while the midcap index dropped by 4.20 per cent.
Global Market Trends:
While Seoul settled in the green, Tokyo, Shanghai, and Hong Kong ended lower in Asian markets. European markets mostly traded in the green, while the US markets closed with significant gains on Tuesday.
Other Market Indicators:
Foreign Institutional Investors (FIIs) bought equities worth Rs 73.12 crore on Tuesday. Additionally, Brent crude climbed to USD 82.81 a barrel.
Economic Data:
India's industrial production growth slowed to 3.8 percent in January, while February retail inflation stood at 5.09 percent, remaining within the Reserve Bank's comfort zone for the sixth consecutive month, according to the latest government data.