Turmoil continues | Investors have lost Rs 11 lakh crore in last 8 sessions

The market failed to sustain the rebound seen late last week and succumbed to selling pressure from the opening trade on March 20. The equity benchmark indices corrected over 0.6 percent, resulting in a loss of more than Rs 2 lakh crore in investor wealth.

The BSE Sensex fell 361 points to 57,629, while the Nifty50 dropped 112 points to 16,988 and formed a bearish candlestick pattern on the daily charts, wiping out the previous day’s gains.

The ongoing US and Europe banking crisis and caution ahead of the US FOMC meeting scheduled for March 21-22, along with consistent FII flows, weighed on sentiment, Given the recent global developments, investors seem to have shifted their money to safe-haven gold, as prices surpassed $2,000 per troy ounce levels in international markets.

“The US banking crisis remained at the centrestage and that kept the participants on their toes. Besides, the continuous outflow of foreign funds added to worries,” said Ajit Mishra of Religare Broking.

There has been an erosion of Rs 2 lakh crore in investor wealth as the BSE market capitalisation dropped from Rs 257.52 lakh crore, to Rs 255.47 lakh crore.

Taking the performance of the last seven consecutive sessions, especially after the previous swing high, investors have lost Rs 10.77 lakh crore of wealth as market capitalisation has fallen from Rs 266.24 lakh crore on March 8.

Most of sectors, barring FMCG, were caught in a bear trap, with Metals falling over 2 percent. The broader markets, too, reeled under selling pressure, with the BSE Midcap and Smallcap indices declining 1 percent each.

Also read: Experts zero in on 10 stocks as market trades below 200-day average

On the global front, Asian as well as European markets traded lower after UBS agreed to take over Credit Suisse for $3.2 billion. Following the emergency rescue, the combined bank will have $5 trillion in invested assets, according to UBS, CNBC reported.

France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.6-1.2 percent, while Hong Kong’s Hang Seng closed with a 2.65 percent loss, followed by Australia’s ASX 200 and Japan’s Nikkei, which lost 1.4 percent each. China’s Shanghai Composite and South Korea’s Kospi fell around half a percent.

Market breadth

Back home, the market was so nervous that over 2 stocks declined for every stock that rose on the BSE.

In all, 387 stocks on the BSE hit their 52-week low on Monday, against 96 stocks that achieved a 52-week high. Stocks that hit a one-year low included more than 60 stocks from the BSE ‘A’ group, the most liquid stocks.

Also read: Indian equity market follows global trend, 1-year forward PE trades below 10-year average

Aarti Drugs, Aavas Financiers, Astec Lifesciences, Avanti Feeds, Balaji Amines, Bata India, Biocon, Blue Dart, Century Plyboard, Crompton Greaves Consumer Electricals, Dilip Buildcon, Emami, HDFC AMC, Dr Lal PathLabs, Laurus Labs, Max Financial Services, Mphasis, Nippon Life, Nazara Technologies, Piramal Enterprises, Reliance Industries, Trident, Uflex, TTK Prestige, V-Mart and Wipro are some of stocks that hit a 52-week low.

Even the number of stocks (257) at the lower circuit outnumbered stocks (176) that hit the upper circuit.

The market may be cautious ahead of the outcome of a two-day US Fed policy meeting. Experts largely expect a 25 bps rate hike by the Fed on March 22, against earlier expectations of a 50 bps hike, especially after the recent US banking crisis that saw SVB filing for bankruptcy, the closure of Signature Bank, and First Republic Bank getting financial aid from 11 US banks.

“The Fed’s interest rate decision is due on Wednesday and the market has reversed its expectation from a 50 to a 25 bps hike, with a probability of 70 percent. Remember that whenever the Fed is done with its hikes, it normally ends up with some crisis and breaks something,” said Amit Pabari, MD of CR Forex Advisors.

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