Markets crash: Investors' wealth erodes by ₹2.25 lakh crore

Investors' wealth eroded by Rs 2.25 lakh crore on Friday, the day when the BSE Sensex tanked 733 points, amid profit-taking and worries over premium valuations of local stocks. The 30-share BSE benchmark dropped 732.96 points or 0.98 per cent to settle at 73,878.15 after soaring 484.07 points earlier in the day. From its intra-day high of 75,095.18, the benchmark tanked 1,627.45 points to the day's low of 73,467.73.

The market capitalisation of BSE-listed companies eroded by Rs 2,25,543.41 crore to Rs 4,06,24,224.49 crore (USD 4.89 trillion).

"Markets failed to capitalise on the firm start despite upbeat US and European cues and crashed on the back of broad-based selling, as investors worried over premium valuations of local stocks offloaded their holdings. Weakness in banking, telecom, oil & gas and realty stocks led the slump, even as Dow Futures indicated an upbeat start.

"As valuation discomfort rises, investors are becoming choosy and taking select bets. Uncertainty over interest rate, gloomy geopolitical scenario and FII fund outflows have prompted investors to book profits at regular intervals," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

From the Sensex basket, Larsen & Toubro, Maruti, Bharti Airtel, Nestle, Reliance Industries, JSW Steel, Kotak Mahindra Bank and UltraTech Cement were among the major laggards.

Bajaj Finance climbed nearly 1 per cent higher. The Reserve Bank of India (RBI) has lifted restrictions on Bajaj Finance on sanctioning and disbursal of loans through eCOM and Insta EMI Card, the company said in a regulatory filing on Thursday.

Bajaj Finserv, Mahindra & Mahindra, State Bank of India, ICICI Bank and Infosys were among the other gainers.

"Profit-booking and a degree of caution ahead of the release of the US non-farm payroll resulted in selling pressure in the market.

"However, the absence of significant negative surprises in Q4 earnings thus far, along with a decline in oil prices, might help to mitigate the downside. Though the correction was broad-based, the large-cap stock was the key underperformer due to the moderation of FII's exposure to the domestic market," said Vinod Nair, Head of Research, Geojit Financial Services.

In the broader market, the BSE smallcap gauge declined 0.55 per cent and the midcap index dipped 0.21 per cent.

Among the indices, telecommunication tanked 1.42 per cent, realty (1.09 per cent), services (1.01 per cent), teck (0.96 per cent), consumer discretionary (0.71 per cent), IT (0.64 per cent) and commodities (0.29 per cent).

In contrast, healthcare and metal were the gainers.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,391.98 crore on Friday, according to exchange data.

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