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The total market capitalisation of BSE-listed companies witnessed a significant downturn, standing at Rs.372.1 lakh crore today, a decline from Rs.385.6 lakh crore recorded in the previous session. In a single day on Wednesday, investors incurred losses amounting to approximately 13.5 lakh crore.
Negative Trends Despite Positive Global Cues
Despite positive signals from global markets, today’s trading session saw the domestic benchmark indices, the Nifty 50 and the Sensex, facing notable setbacks. While the day commenced with marginal gains, both indices experienced a drop of over 1%. Analysts attribute the decline primarily to the sharp downturn in the midcap and small-cap indices, which plummeted by 4 to 5% during today’s trading session.
SEBI’s Intervention Sparks Market Volatility
Recent turbulence in the Small and Midcap segments can be traced back to SEBI’s stringent measures against over-speculation, aimed at safeguarding the interests of market participants. The indices witnessed a dip below their recent consolidation levels, intensifying bearish sentiments among investors. Rupak De, Senior Technical Analyst at LKP Securities, emphasizes the importance of selective investing amidst increased volatility in the market landscape.
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Sensex and Nifty Close Lower
The 30-share BSE Sensex concluded the day lower by 906.07 points or 1.23%, settling at 72,761.89 level, while the Nifty 50 closed at 21,997.70 level, down by 338 points or 1.51%. Arvinder Singh Nanda, senior vice-president at Master Capital Services Ltd, highlighted concerns over the overvaluation of midcap and small-cap stocks, echoing sentiments expressed by market regulators earlier in the week.
US Bond Yields and Index Heavyweights Contribute to Decline
The rise in US bond yields following US CPI inflation data, coupled with selling pressure on index heavyweights such as Reliance Industries (RIL) and select Tata group companies, further fueled the downward trend.
Fundamental Outlook Remains Positive
Despite prevailing challenges, analysts like Vinod Nair, Head of Research at Geojit Financial Services, maintain a positive long-term outlook for domestic midcaps, citing no fundamental problems impacting their growth prospects. While uncertainties linger regarding the Fed’s interest rate policy and inflation trends, signs of easing domestic inflation coupled with potential rate cuts in the future offer optimism for equities in the long run.
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