Stock market crash: Investors lose over Rs 5 lakh crore on Friday

Investors on Dalal Street witnessed wealth erosion of over Rs 5.41 lakh crore on Friday as market participants preferred to book profits, amid weak global cues and concerns over hardening bond yields in the US.

Sensex cracked 1939.32 points, or 3.80%, to 49,099. Led by weak sentiments, market capitalisation of BSE-listed firms declined to Rs 200.77 lakh crore from Rs 206.18 lakh crore on February 25. Likewise, NSE Nifty index settled 568 points, or 3.76%, down at 14,529.15.

All the 30 components in the Sensex pack ended in the red with ONGC falling the most 6.60%. It was followed by Mahindra & Mahindra (down 6.35%), Axis Bank (down 5.98%), Kotak Mahindra Bank (5.96%), Bajaj Finserv (down 5.95%).

Analysts said that rising bond yields seem to have eroded investor interest in riskier equities. Vinod Nair, Head of Research at Geojit Financial Services said, “Domestic markets tumbled in line with global trend triggered by a sharp rise in bond yields. Increasing geopolitical tension between the US and Syria aggravated the selling. Q3 GDP data which is to be released today also added volatility in the Indian market. Although negative, mid and small caps outperformed their larger indices showing investor confidence. The market will gain momentum as the global market is expected to stabilise supported by maintaining accommodative monetary policy and a growing economy.”

The BSE Midcap index settled 1.75% down at 19,978.65, while the Smallcap index closed 0.74% lower at 20,155.35. Among the sectoral indices on BSE, the Bankex, Telecom and Oil & Gas index declined 4.87%, 3.85% and 3.72%, respectively.

On Thursday, the US 10-year yield climbed to 1.614%, which is the highest in a year. “Concerns over inflation in the US is the reason behind rising of bond yields. The bond market is expecting the likely rise in inflation to push the US Federal Reserve to either lower monthly bond-buying or hike interest rates, an adverse factor for markets like India, which have been a major recipient of foreign inflows of late,” said Devang Mehta, Head Equity Advisory, Centrum Broking.

Meanwhile, stock exchanges in Europe were also trading with losses in mid-session deals.