Stock markets leave investors poorer by Rs 2.3 lakh cr in one day; here’s what pushed markets lower

The market capitalization of all BSE listed firms stood at Rs 156.8 lakh crore on Thursday evening, the same was down to Rs 154.5 lakh crore on Friday.

Domestic benchmark indices sank on Friday, following weaker global cues.  S&P BSE Sensex ended down 633 points, while the 50-stock Nifty was well below the 11,350 mark on the closing bell. With today’s fall, the benchmark indices managed to erase all gains made since August 21. Since the beginning of this week, Sensex has slipped 3.88%, wiping of over 1,500 points. Along with global cues, market participants also attribute the loss registered this week partially to the new margin rules of SEBI. Only one Sensex constituent ended the day with gains. 

Investors left poorer: With the equity markets tanking on Friday, investors were left poorer by Rs 2.3 lakh crore. The market capitalization of all BSE listed firms stood at Rs 156.8 lakh crore on Thursday evening, the same was down to Rs 154.5 lakh crore on Friday at the end of the day’s trading. So far this week, investor wealth worth Rs 3.8 lakh crore was erased.

Global cues: Stock markets across Asia ended with losses on Friday. Kospi, Topix, Nikkei 225, Hang Seng were all down in the red. “Selloff in US technology stocks had a cascading effect on global markets and Indian benchmark indices reacted to this and closed with losses of around 1.5%. European markets were trading positive in early trades, following merger talks and expectation of more stimulus measures,” said Vinod Nair, Head of Research at Geojit Financial Services. 

Financials bleed: Some of the worst performing stocks were from the banking and finance space. Axis Bank was down 4%, SBI tanked 3% and ICICI Bank fell 2.6%. S&P BSE Bankex index was 2% down. The Nifty PSU Bank index ended 2.6% lower.

Heavyweights slip: All the names like Reliance Industries, ICICI Bank, HDFC, HDFC Bank were seen trading more than 1% lower today. Even defensives like Information Technology sector players ended with losses.

Economic green-shoots amiss:  Along with the contraction in GDP,  key economic indicators like GST collection have failed to impress Dalal Street. “The market remained cautious on weaker-than-expected GDP prints and weak GST collections even while PMI and auto sales showed some improvement,” said Sanjeev Zarbade, VP PCG Research, Kotak Securities.

Out-performers: Despite a weaker market sentiment, seven BSE 500 constituents were seen hitting their respective 52-week highs. These included Adani Gas, AMber Enterprises, Astrazeneca Pharma, Granules India, Vodafone Idea, Jamna Auto, and Timken India. However, Adani Gas and Vodafone Idea later slipped into the red. Maruti Suzuki was the only Sensex gainer today.

Outlook: “Given that the Indian economy has almost opened up, it can reasonably be concluded that markets may have largely discounted all good factors. Since markets had bottomed prior to lockdowns and by the very same logic markets should register a top once the economy opens up. It would be pertinent to logically assess the aftermath of COVID-19 which will now be felt in the run up to Q2 & Q3 earnings performance,” said Nirali Shah, Senior Research Analyst, Samco Securities.

Technical take: “We managed to stick above the 11300 level which is a saving grace for the bulls until markets reopen on Monday. If we breach this level on a closing basis, we could enter into a short term bear phase. On the upside, we need to get past 11600 for the markets to continue its upward momentum,” said Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments.