Carnage on D-Street as Sensex and Nifty tumble by over 1%, investors lose Rs 13 lakh crore in 2 days
Oct 22, 2024, 17:37 IST
It was complete mayhem on the bourses today, as Nifty and Sensex slumped by over 1% each. While Nifty ended the day at 24,472.10 points, down by 1.25%, Sensex tumbled a massive 930 points to close the day at 80,220.72 points. The pullback was majorly caused by large stocks such as Bharat Electronics Limited, Mahindra and Mahindra, Coal India, and Adani Entertainment, which fell by more than 3%, and SBI, which dipped by 2.97%.
Both midcap and smallcap indices also witnessed significant bloodshed, with midcap 50 falling by 2.45% during the day, midcap 100 dipping by 2.61%, smallcap 100 tumbling by 3.92%, smallcap 50 falling by 3.7%, and microcaps plummeting 4.14%. Amidst the constituents of Nifty50, only 3 stocks advanced today, while 47 others saw declines.
Aditya Gaggar, Director of Progressive Shares, highlights that almost all the sectors ended in the red, with PSU Banks and Realty being the major laggards. "The weak link of the markets, i.e., mid- and small-caps, tumbled by 2.61% and 3.92% and underperformed the frontline index. Considering the oversold conditions in the mid- and small-cap segments, a short-term bounce can be expected in the markets, which may push the index higher, but the upside seems to be capped at 24,670".
Rajesh Bhosale, equity technical analyst at Angel One, cautions traders against taking long positions until there are clear signs of a bullish reversal. "The midcap space, in particular, saw a sharp decline, breaking below key support levels, signaling more pain ahead—bottom-fishing in this sector should be avoided for now," he added.
Investor wealth worth Rs 8.98 lakh crore was wiped off the markets today, with the BSE m-cap dipping from Rs 453.65 lakh crore yesterday to Rs 444.66 crore today. Broader mid- and small-cap indices saw their worst losses since August, riding on the back of disappointing earnings and cautious management guidance for the upcoming quarters. As such, hefty profit-booking ensued to make the most of still elevated valuations.
The last time Indian markets had witnessed such intense selling was in 2021–22, i.e., during the peak of the COVID-19 pandemic. Data from NSDL suggests that during this period, FPIs had sold Rs 1,22,242 crore worth of assets in the Indian markets.
Gaurav Garg, Research Analyst at Lemonn Markets Desk, highlights that mid- and small-caps bore the brunt of earnings disappointments, as these are also the segments most stretched on many valuation metrics. "Growth slowdown concerns, along with uncertainty on rate cut timing, act as a double whammy for equity markets, especially after recent inflation data surprised sharply to the upside," he added.
Looking ahead, the markets will continue to focus on the earnings announcements. Investors will look to the RBI's monetary policy meeting minutes tomorrow and the HSBC Manufacturing, Services, and Composite PMI data on Thursday for further signals to act upon.
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Both midcap and smallcap indices also witnessed significant bloodshed, with midcap 50 falling by 2.45% during the day, midcap 100 dipping by 2.61%, smallcap 100 tumbling by 3.92%, smallcap 50 falling by 3.7%, and microcaps plummeting 4.14%. Amidst the constituents of Nifty50, only 3 stocks advanced today, while 47 others saw declines.
Aditya Gaggar, Director of Progressive Shares, highlights that almost all the sectors ended in the red, with PSU Banks and Realty being the major laggards. "The weak link of the markets, i.e., mid- and small-caps, tumbled by 2.61% and 3.92% and underperformed the frontline index. Considering the oversold conditions in the mid- and small-cap segments, a short-term bounce can be expected in the markets, which may push the index higher, but the upside seems to be capped at 24,670".
Rajesh Bhosale, equity technical analyst at Angel One, cautions traders against taking long positions until there are clear signs of a bullish reversal. "The midcap space, in particular, saw a sharp decline, breaking below key support levels, signaling more pain ahead—bottom-fishing in this sector should be avoided for now," he added.
Investor wealth worth Rs 8.98 lakh crore was wiped off the markets today, with the BSE m-cap dipping from Rs 453.65 lakh crore yesterday to Rs 444.66 crore today. Broader mid- and small-cap indices saw their worst losses since August, riding on the back of disappointing earnings and cautious management guidance for the upcoming quarters. As such, hefty profit-booking ensued to make the most of still elevated valuations.
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FIIs on a heavy selling spree
The massacre in the markets comes amidst heavy offloading of stakes by FIIs (foreign institutional investors). Data suggests so far this month, FIIs have offloaded a staggering Rs 82,479.73 crore in Indian markets. DIIs (domestic institutional investors) have been trying to maintain some semblance and balance in the markets, having bought 77,402.11 crore worth of assets in the Indian markets. However, that has proved insufficient for maintaining the positive momentum of the markets.The last time Indian markets had witnessed such intense selling was in 2021–22, i.e., during the peak of the COVID-19 pandemic. Data from NSDL suggests that during this period, FPIs had sold Rs 1,22,242 crore worth of assets in the Indian markets.
Gaurav Garg, Research Analyst at Lemonn Markets Desk, highlights that mid- and small-caps bore the brunt of earnings disappointments, as these are also the segments most stretched on many valuation metrics. "Growth slowdown concerns, along with uncertainty on rate cut timing, act as a double whammy for equity markets, especially after recent inflation data surprised sharply to the upside," he added.
Looking ahead, the markets will continue to focus on the earnings announcements. Investors will look to the RBI's monetary policy meeting minutes tomorrow and the HSBC Manufacturing, Services, and Composite PMI data on Thursday for further signals to act upon.