Stock market sees worst week in over two years

It was the worst week for the market in more than two years, since March 2020, as the benchmark Sensex fell 5.73 per cent and the Nifty-50 fell 5.61 per cent in five sessions, touching a new 12-month low.

Amid extreme volatility seen on Friday, the Nifty50 hit a low of 15183.40 intraday falling for the sixth consecutive session but later recovered to close at 15293.50 down 67.10 points or 0.44 per cent and the Sensex settled at 51360.42 down 135.37 points or 0.26 per cent.

Foreign portfolio investors made the biggest single day selling on Friday worth Rs 7,818.61 crore as per the provisional data. Domestic institutions also made hefty buying of equities worth Rs 6,086.92 crore as per the BSE provisional data, indicating oversold market conditions.

"The dominant theme impacting equity markets globally is the synchronised global monetary tightening and the consequent fears of economic slowdown," said analysts.

In the broader market, the BSE Mid-cap Index fell 5.61 per cent during the week. It suffered heavier damage for the second consecutive day, falling 0.68 per cent and the BSE Small-cap was down 0.88 per cent on Friday.

"Globally as well as domestically equity markets saw carnage in the last couple of trading sessions as central banks across the world made aggressive rate hikes. The Nifty corrected by almost 18 per cent from its peak and is entering the bear phase. Further delay in monsoon, persistent FII selling and rising Covid cases have also dented sentiments. The volatility index also called fear gauge NSE's India VIX has inched higher and is trading at 22.76 which indicates volatility is likely to continue for now," said Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services.

"The S&P 500 and our banking index NSE's NIfty Bank ( made a high of 41829 earlier but now at 32743) have officially entered bear market territory and the fear witnessed this week is expected to continue. The movement of the dollar index, crude oil prices, and the evolving Covid situation in China and India will be closely watched," said Yesha Shah, head of equity research, Samco Securities.

"While market sentiment is extremely bearish, the indices have become oversold in the near term. Even the major global indices are trading near the support of the falling channel. As a result, a short-covering bounce cannot be ruled out," Shah added.