Investors poorer by over Rs 8.21 trillion as markets go into tailspin

Investors’ wealth eroded by a massive Rs 8,21,666.77 crore on Monday as the market saw a massive sell-off not seen in many months.

The BSE benchmark Sensex plunged 1,170.12 points or 1.96 per cent to close at 58,465.89. This is the worst single-day drop for the gauge in over seven months. This was also the fourth straight session of decline for the Sensex.

During the day, the index tumbled 1,624.09 points.

Following the weak trend, the market capitalisation of BSE-listed companies tumbled by Rs 8,21,666.77 crore to Rs 2,60,98,530.22 crore.

“Indian market witnessed a sharp sell-off in today’s trading session amid stable global cues. Heavyweight Reliance puts pressure on the market while withdrawal of Farm laws bills and poor performance of Paytm IPO are some excuses for a long-awaited correction. FIIs are selling continuously in the Indian market as they feel valuations are stretched however they still have a long-term bullish view on India,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Bajaj Finance, Bajaj Finserv, Reliance Industries, NTPC, Titan and SBI were the biggest laggards, falling up to 5.74 per cent.

Reliance Industries tumbled over 4 per cent, after the company shelved a proposed deal to sell a 20 per cent stake in its oil refinery and petrochemical business to Saudi Aramco for an asking of USD 15 billion.

“Subdued listing and continuation of weak trading of Paytm, India’s largest new generation fintech, is a big sentimental setback to the domestic market, which was thriving on the strong primary market. It will impact the inflow of money from the retail segment, which has been a key player during the year. FIIs are also a seller due to fear of overvaluation of India compared to peers.

“Weak inflow from FIIs will possibly get higher due to the withdrawal of three agriculture farm acts which brings a stoppage to governments reformist agendas in context to coming state elections next year. It was a key factor for India to trade at a premium to EMs during the year,” Vinod Nair, Head of Research at Geojit Financial Services said.

One97 Communications, Paytm’s parent company, tumbled over 13 per cent to close at 1,360.30 a share on the BSE.

In the broader market, the midcap and smallcap indices fell up to 2.96 per cent.

“Cancellation of Reliance-Aramco deal, withdrawal of agriculture farm acts, persistent selling by FIIs and disappointment from Paytm’s listing dented market sentiments and led to free fall in the market,” according to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor