Share market crash make investors poorer by Rs 2.52 lakh cr

New Delhi: Investors' wealth on Friday plunged by Rs 2.52 lakh crore as the benchmark Sensex tanked 793.25 points due to heavy selling after a recent record-breaking rally.

The 30-share BSE benchmark tanked 793.25 points or 1.06 per cent to settle at 74,244.90.

The market capitalisation of BSE-listed companies declined by Rs 2,52,301.16 crore to Rs 3,99,67,051.91 crore (USD 4.79 trillion).

"The market had been building up hope of three rate cuts by the US Fed this fiscal year, but the recent higher inflation reading has mellowed the expectations, which would mean that the wait for rate cut would be longer than expected. Hence, the sell-off in the Indian markets was a knee-jerk reaction to the rising inflation and fading hopes of a rate cut in the near future," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

A sharp rise in crude oil prices and rupee's downward spiral also dampened the sentiment and contributed to the overall slump.

"While the Indian economy is on a firm footing, the spate of negative news, especially from the global front, would at times halt the Indian equities upward march," Tapse said.

Among the Sensex firms, Sun Pharma, Maruti, Power Grid, Titan, JSW Steel, Tech Mahindra, Larsen & Toubro and State Bank of India were the major laggards.

Tata Motors, Tata Consultancy Services and Nestle were the gainers.

In the broader market, the BSE smallcap gauge declined 0.60 per cent and midcap index dipped 0.49 per cent.

All the indices ended lower, with oil & gas falling by 1.28 per cent, utilities (1.02 per cent), realty (0.96 per cent), bankex (0.91 per cent) commodities (0.84 per cent), IT (0.84 per cent) and financial services (0.81 per cent).

A total of 2,373 stocks declined while 1,466 advanced and 104 remained unchanged.

"US inflation soared by 0.4% MoM, surpassing expectations and triggering a spike in US Treasury yields. Investors are questioning the feasibility of the US Fed's anticipated 3 rate cuts this year, leading to underperformance in EMs.

"Meanwhile, European markets excelled as the ECB maintained policy rates but hinted at a potential rate cut soon. Indian markets consolidated amidst worries over delayed US rate cuts, escalating Middle East tensions driving oil prices up, and subdued Q4 earnings projections," said Vinod Nair, Head of Research, Geojit Financial Services.

The BSE benchmark climbed 354.45 points or 0.47 per cent to settle at an all-time high of 75,038.15 on Wednesday. The Nifty advanced by 111.05 points or 0.49 per cent to reach a record closing peak of 22,753.80. During the day, it jumped 132.95 points or 0.58 per cent to hit a lifetime intra-day peak of 22,775.70.

Stock markets were closed on Thursday on account of Eid-Ul-Fitr.