Fear Factor: Bear rout erases nearly Rs 7 lakh cr from investors' wealth

Mumbai, Feb 19 (PTI) Investors' wealth was eroded by nearly Rs 7 lakh crore on Thursday as the stock markets took a heavy beating with the BSE Sensex tumbling 1,236 points or 1.5 per cent amid escalating geopolitical tensions between the US and Iran.

The 30-share BSE Sensex tumbled 1,236.11 points, or 1.48 per cent, to settle at 82,498.14. During the day, the benchmark nosedived 1,470.05 points, or 1.75 per cent, to hit an intraday low of 82,264.20.

The market capitalisation of BSE-listed firms slumped by Rs 6.79 lakh crore (Rs 6,79,210.1 crore) to Rs 465 lakh crore (Rs 4,65,22,014.57 crore (USD 5.13 trillion).

Selling pressure was widespread, led by IndiGo, followed by Mahindra & Mahindra, UltraTech Cement, Trent, Bharat Electronics Ltd, Adani Ports, Kotak Mahindra Bank, Reliance Industries, Tech Mahindra, ITC, Eternal and PowerGrid.

The sharp selloff in equities today was triggered by news of an imminent US strike on Iran. The US Vice President JD Vance's statement that Iran didn't meet all expectations of Washington and the President has the military option to strike Iran, sent fear in markets, VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

He added that Brent crude shot up above USD 70 per barrel and the fear gauge India VIX rose 9 per cent.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 880.49 crore on Thursday, while domestic institutional investors were also the net sellers of stocks worth Rs 596.28 crore, according to the exchange data.

"Institutional selling - both domestic and foreign - was limited. Yet the Sensex tanked by 1,236 points, reflecting fear in the market.

"The market rally during the last three days, assisted by improving Q3 numbers and FIIs turning buyers, enabled profit booking by bulls. This magnified the selling pressure, finally ending in a sharp correction," Vijayakumar said.

In European markets, Berlin's DAX declined the most by 1 per cent, Paris' CAC 40 by 0.86 per cent, and London's FTSE 100 by 0.76 per cent.

In Asian markets, South Korea's Kospi settled 3 per cent higher, while Japan's Nikkei 225 benchmark closed 1 per cent higher. Markets in Hong Kong and mainland China remained closed for the Lunar New Year holidays.

Broader indices ended lower, with the BSE Midcap Select Index declining 1.71 per cent, while Smallcap Select Index fell 0.98 per cent.

Among the sectoral indices, Realty dropped the most by 2.54 per cent, followed by Power by 2.22 per cent, Capital Goods by 2.18 per cent, Services by 2.11 per cent, Auto by 2.09 per cent, Consumer Discretionary by 1.91 per cent, Utilities by 1.90 per cent, and Industrials by 1.81 per cent.

A total of 2,927 stocks declined, while 1,276 advanced and 164 remained unchanged on the BSE. PTI HG HG MR