Indian stock markets wipe out nearly ₹5 lakh crore investor wealth, but analysts say this could be an opportunity to ‘buy the dip’

• Indian markets tumbled today following global markets as central banks around the world continue to raise interest rates to control inflation.
• Bank, metal and IT company stocks fell the most on the street as Sensex and Nifty50 tumbled nearly 2%.
• In the process, nearly ₹5 lakh crore of investor wealth has been wiped out.
• Analysts believe this is a short term correction and there is enough buying opportunity in the IT and FMCG space.

The Indian stock market is going through a rough day as there is a huge sell-off which has wiped out nearly ₹5 lakh crore investor wealth. The total market capitalisation of BSE listed companies fell to ₹254 lakh crore from ₹259 lakh crore.

On the 50-stock benchmark index, Nifty50, only five stocks were trading in the green, with the rest in red.

The primary trigger behind the steep fall in the stock markets is the massive correction in US stock markets following US Fed’s rate hikes, a day after markets rallied before realising the US central bank’s aggressive rate hike outlook.

US benchmark index, Nasdaq dropped nearly 6% as shares of large companies like Alphabet, Apple, Microsoft, Meta, Tesla and Amazon tumbled steeply.

HCL Technologies, Tata Motors and Wipro are some of the biggest victims of the sell-off today.

Short term correct, say analysts, and a good time to ‘buy the dip’

Analysts believe this is a short term correction and there is enough buying opportunity in the IT and FMCG space.

“I think it’s just a reaction and we do expect this to be a short term reaction. Overall fundamentally, things are quite bullish. In fact, this is a good buying opportunity given some of the stocks have also corrected. Also, since this is a result season usually you see some bit of profit booking also happening after results coming out so selectively those factors have come together,” said Neha Khanna, director at ValPro.

“Fundamentally I don't see anything creating much of an issue,” she added.

Sectorally, she is quite bullish on consumer, financial services and banking as many stocks have potential. Some IT stocks have also corrected a fair bit and the results show they continue to perform well, says Khanna

Here are the top performers in the weak market.
After the Indian central bank, the Reserve Bank of India, announced a 40 basis point hike in benchmark interest rates, banking stocks may see some correction in the near term, say analysts.

“The benchmark indices are in a correction mode taking cues from selling in the global markets. The sudden rate hike by RBI to curb the soaring inflation has also put the markets under pressure,” said Ravi Singh, vice president and head of research at Share India.

“Nifty may remain under pressure for a few more trading sessions and a closing below 16300 levels may drag Nifty up to the levels of 15700. Banking sector may see a further correction of around 2-3 percent from current levels. FMCG and IT sector seems attractive for value buying,” he added.


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