The recent stock market crash, now stretching into its fourth session on Tuesday, has led to investors losing a massive Rs 16.77 lakh crore of wealth. Investors have seen their wealth shrink over the past four trading sessions as markets have remained under pressure amid soaring crude oil prices and growing concerns over a prolonged geopolitical conflict.Persistent foreign fund outflows and the rupee sliding to record lows have further dampened sentiment, prompting investors to stay cautious and intensify selling across equity markets. Add to that, nudge towards austerity by PM Narendra Modi has left markets jittery.On Tuesday, the 30-share BSE Sensex plunged 1,456.04 points, or 1.92%, to close at 74,559.24. Over the last four trading days, the benchmark index has dropped 3,399.28 points, translating into a decline of 4.36%!The combined market valuation of companies listed on the BSE fell by Rs 16.77 lakh crore during the period, taking the total market capitalisation down to Rs 4,56,02,981.70 crore ($4.77 trillion).According to Ponmudi R, CEO of Enrich Money, Indian equities continued to face sustained pressure due to a combination of adverse global and domestic developments weighing heavily on investor confidence. He said uncertainty surrounding the stalled US-Iran talks, continued disruption around the Strait of Hormuz that pushed energy prices sharply higher, the rupee touching fresh record lows, ongoing foreign institutional investor selling, and weakness across sectors such as IT and real estate collectively triggered a broad-based market sell-off during the session.Brent crude, the global benchmark for oil prices, was trading nearly 3% higher at $107.4 per barrel.Market breadth remained weak on Tuesday, with 3,412 stocks declining on the BSE, while 869 advanced and 129 remained unchanged.Among the Sensex constituents, major losers included Tech Mahindra, Adani Ports and Special Economic Zone, HCL Technologies, Tata Consultancy Services, Titan Company and Bharat Electronics.State Bank of India emerged as the only gainer among Sensex stocks.In the broader market, the BSE MidCap Select index tumbled 2.92%, while the SmallCap Select index declined 2.73%.Sector-wise, realty stocks suffered the sharpest fall with a 4.22% drop, followed by Focused IT at 3.61%, services at 3.51%, IT at 3.37%, consumer durables at 3.35%, and industrials at 3%.
What’s the road ahead for Sensex & Nifty?
According to Hitesh Tailor, Technical Research Analyst at Choice Equity Broking Private Limited, the near-term outlook remains bearish to cautious, as sustained selling pressure and weak sentiment continue to dominate market direction.“Volatility is expected to remain elevated in the short term, and unless the index manages to reclaim resistance levels decisively, recovery attempts may remain limited and vulnerable to further profit booking,” he says.Hariprasad K, Research Analyst and founder of Livelong Wealth, said the current correction does not resemble a routine phase of profit booking. According to him, investors increasingly appear to view recent policy messaging and calls for austerity as signs that authorities may be preparing for a more challenging macroeconomic environment.“Unlike a routine profit-booking phase, the current decline appears to be driven by a broader confidence shock in the market. Investors are increasingly interpreting recent policy messaging and austerity-oriented commentary as an indication that policymakers may be preparing for a tougher macroeconomic environment ahead.”He added that Indian equities are currently facing a macroeconomic “triple hit” comprising crude oil prices hovering around $105-107 per barrel, the rupee weakening to fresh record lows against the dollar, and continued aggressive foreign institutional investor outflows.Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd is of the view that unless there is any meaningful progress in negotiations or signs of de-escalation in the West Asia conflict, volatility and weakness in domestic equities are likely to persist. “Sectorally, higher crude prices may negatively impact paint, aviation, chemical and OMCs due to rising input costs. On the other hand, upstream oil companies such as ONGC and Oil India are likely to benefit from improved realisations amid elevated energy prices. Investors are also expected to closely track stock-specific earnings action on the domestic front,” he says.“EV-related companies could remain in focus amid rising fuel price concerns, while defensive sectors such as Pharma and FMCG may witness relative outperformance during heightened uncertainty. Base metal stocks will stay in focus after global copper prices surged to record highs,” Khemka says.“The inflation print will play a key role in shaping expectations around the RBI’s policy trajectory, particularly amid rising crude oil prices and persistent currency weakness. Overall, market sentiment is likely to remain fragile until there is greater clarity on geopolitical developments and stability in energy prices,” he adds.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.)