MARKETS IN BEAR HUG
Sensex falls by 1,200 points intraday, recovers to end the day losing 560 pts
Indian equity markets plunged on Tuesday wiping out around `5 lakh crores of investors wealth in just the first few minutes of trade as the rout in the global equities extended for the third consecutive day with the Dow Jones Industrial Average in US sinking more than 1,100 points or 4.6 per cent, its biggest single day slide in percentage terms since August 2011.
Reacting to the weakness in global stocks that saw major equity indices crumble, the Sensex crashed 1,274.35 points in the early trade to hit an intra-day low of 33,482.81 while the Nifty tumbled 390.25 points to a low of 10,276.30.
However, both the equity indices pared some of their losses as cash surplus domestic fund houses chipped in at lower levels mopping up stocks worth `1,700 crore. The Sensex ended the day at 34,195.94, down 561.22 points or 1.61 per cent and the Nifty closed the session at 10,498.25, losing 168.30 points or 1.58 per cent.
In the last six successive sessions, investors became poorer by nearly `10 lakh crore. Around `2.7 lakh crore of wealth was wiped out on Tuesday.
Led by a continuous sell-off, the market capitalisation of BSE-listed companies plummeted by `9,90,477 crore to `1,45,22,830 crore in six trading sessions.
Around 188 stocks including Aditya Birla Capital, Andhra Bank, Bajaj Hindusthan Sugar, BGR Energy Systems, Central Bank of India, Cummins India, Godfrey Phillips India, hit fresh 52-week lows on BSE.
As many as 32 stocks hit their 52-week high on BSE today, including Polaris Consulting & Services, Tata Steel, Bharti Airtel, Larsen & Toubro and ICICI Bank.
In the domestic market, volatility index (VIX), also known as the fear index jumped 24.68 per cent on the NSE suggesting that traders have aggressively bought ‘put’ options contracts in the derivatives market as a hedge against any unexpected fall in the coming days.
“This correction will be helpful in bringing valuations to a more realistic and attractive level for the new entrants as well as for long term players,” said Anita Gandhi, whole time director, Arihant Capital Markets.
“In the last few sessions since the Union Budget, the Nifty has lost nearly 700 points on a closing basis, although it is much higher on an intraday basis. The disappointing results of Lupin, Punjab National Bank and Tata Motors have also been instrumental in pushing the markets further down. However, it may be too early to really take a view on the direction of the markets at this point of time,” said Vaibhav Agrawal, head of research, Angel Broking.