Investors poorer by over ₹3 lakh crore in two days of market fall

Investor wealth tumbled by a whopping ₹3.36 lakh crore in two successive sessions of decline in the equity market following escalation in tensions in the Middle East.

Equity markets fell for second consecutive session, with the 30-share key BSE index plummeting 787.98 points, or 1.90 percent, to close at 40,676.63, on Monday. During the trade, it dropped 850.65 points to 40,613.96.

The Sensex had ended 162.03 points, or 0.39 percent, lower at 41,464.61 on Friday as well. Led by the weakness in equities in two consecutive trading sessions, the market capitalisation of BSE-listed companies plunged by ₹3,36,559.82 crore to ₹1,53,90,312.60 crore.

“Indian markets started the week on a negative note amid an escalation of geopolitical tensions between the US and Iran. Rising crude oil prices and adverse rupee movement too impacted the sentiments,” Religare Broking Ltd VP – Research Ajit Mishra said.

“Amongst the broader markets, BSE midcap and smallcap underperformed. All the sectoral indices witnessed heavy selling pressure and ended with losses wherein auto, banking and metals were the top losers,” he added.

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US President Donald Trump on Sunday vowed “major retaliation” if Iran tries to avenge the killing of its key military commander Qasem Soleimani.

Brent crude oil futures surged nearly 2 percent to USD 69.81 on Monday, while the rupee depreciated 24 paise against the US dollar to 72.04 (intra-day).

On the Sensex chart, Bajaj Finance was the top loser, dropping 4.63 percent, followed by SBI, IndusInd Bank, Maruti, and HDFC.

At the BSE, 1,944 stocks declined, while 604 advanced and 181 remained unchanged. The S&P BSE Smallcap index closed 1.96 percent lower, while the BSE Midcap index fell 2.31 percent.

Along with crude oil, the negative impact of currency is also weighing on Indian markets, Oza added. Brent crude oil futures surged nearly 2 percent to $69.81.

The rupee depreciated 24 paise against the US dollar to 72.04 (intra-day).

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Bourses in Shanghai, Hong Kong, Tokyo, and Seoul ended lower. European markets were also trading in negative terrain in early sessions.

Apart from the Iran tensions and the Brent crude touching a six-month high of $70.24 per barrel, the rupee also nose-dived below the 72-mark. This happened in the backdrop of a rise in crude prices.

A weak rupee does not augur well for India as it will drive up the price of imports. The rupee had opened 21 paise lower at 72.10 per dollar, versus Friday’s closure of 71.80.

Also, the India VIX, a scale on which volatility in the market is measured on the basis of NIFTY open index prices, rose 16 percent to 14.8.

(With inputs from agencies)