Investors Poorer By ₹9.78 Lakh Crore As Middle East Conflict, Foreign Fund Outflows Take Toll On Markets

Equity investors became poorer by Rs 9.78 lakh crore on Thursday, dragged by a sharp fall in the stock markets where the BSE Sensex plunged over 2 per cent, amid spiralling conflict in the Middle East and unabated foreign fund outflows.

The BSE Sensex tumbled 1,769.19 points or 2.10 per cent to settle at 82,497.10. During the day, it plummeted 1,832.27 points or 2.17 per cent to 82,434.02.

Tracking an extremely weak trend in equities, the market capitalisation of BSE-listed firms eroded by Rs 9,78,778.57 crore to Rs 4,65,07,685.08 crore (USD 5.54 trillion) in a single day.

"There was carnage on Dalal Street as markets plunged on across-the-board selling pressure on twin concerns of foreign funds pulling out funds from emerging markets, including India, and steadily increasing exposure to Chinese markets after the recent stimulus measures, while the escalating tensions in West Asia too has set alarm bells amongst the investors," Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, said.

Also, Indian markets had witnessed a stupendous rally over the past one month and the correction was in the waiting for some time, he added.

From the 30 Sensex firms, Larsen & Toubro, Axis Bank, Tata Motors, Reliance Industries, Maruti, Asian Paints, Bajaj Finance, Bajaj Finserv, Kotak Mahindra Bank, Adani Ports, Titan and HDFC Bank were the major laggards.

JSW Steel emerged as the only gainer.

"Indian equity benchmarks faced a significant sell-off on Thursday as geopolitical tensions in the Middle East weighed heavily on market sentiment. This decline marked the third-largest drop of the year for the Sensex, with nearly Rs 10 lakh crore wiped off market capitalisation," Vikram Kasat, Head - Advisory, PL Capital - Prabhudas Lilladher, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 5,579.35 crore on Tuesday, according to exchange data.

All indices ended lower. Realty tanked 4.49 per cent, capital goods (3.18 per cent), auto (2.94 per cent), services (2.87 per cent), industrials (2.75 per cent) and oil & gas (2.52 per cent).

A total of 2,881 stocks declined while 1,107 advanced and 88 remained unchanged on the BSE.

In Asian markets, Hong Kong settled lower while Tokyo ended in the positive territory. Markets in mainland China will be closed for the rest of the week due to holiday.

European markets were trading mostly lower. The US markets ended marginally higher on Wednesday.