Black Monday: Sensex tanks 1,170 points; Nifty ends below 17,450; RIL, realty & PSU banks crack

After three consecutive sessions of downfall bears further tightened their grip on the markets in the fourth session as a bloodbath was witnessed on Dalal Street. The sell-off wiped off Rs 7.85 lakh crore of investors as the market capitalization of all listed companies plummeted to Rs 261.34 lakh crore amid rising inflation and fresh Covid cases in Europe and lockdowns in countries like Austria. The dollar index rising above 96 is another concern. In the last hour of trade, indices saw some recovery amid buying interest at lower levels at the close, Sensex plunged 1,170 points or 1.96% to 58,465 whereas the Nifty 50 settled at 17,441 tanking 323 points or 1.82%.

“Finally the Bears got their act together after a long wait as a series of events over the weekend gave them the upper hand with almost all the sectoral indices barring the Metal Index plunging today. The repeal of the agriculture laws had an impact on the PSU stocks while the O2C deal not going through left a 4.5% cut on Reliance. Even as IPO Investors come to terms with the reality, the inflationary impact on demand across several sectors continues to worry the street,” said S Ranganathan, Head of Research at LKP Securities.

RIL & Saudi Aramco deal: Markets reacted to the news of a deal between Reliance Industries (RIL) and global oil giant Saudi Aramco for a 20 per cent stake acquisition by the Saudi firm in the oil to chemicals (O2C) business of the former being put on the backburner for now. However, analysts on the street are of the opinion the news could be sentiment-negative for RIL’s stock price, and sees limited financial impact, given the deleveraging achieved in the past 18 months.

Flop show: The largest IPO – Paytm – debuted on a disappointing note ending at the lower circuit on the day of listing last week. The stock touched a low of Rs 1,271.25 in today’s session but recovered from the lows to end at Rs 1,362. The sell off was extended to other recently listed startups like PB Fintech, Fino Payments Bank, Zomato and Nykaa.

FIIs selling: The foreign institutional investors (FIIs) were net sellers of stocks worth Rs 3,930.62 on Thursday, thus taking the total net selling to nearly Rs 10,000 crore so far this month in the cash segment. This is following Rs 25,572 crore worth selling in October. Since the start of this fiscal year, FIIs have net sold shares to the tune of Rs 75,500 crore.

Profit booking: Banks, NBFCs, Realty and auto stocks were under pressure as profit booking was witnessed as investors preferred to take home some profits given the change in sentiment.

Even broader market indices were trading down, underperforming their headline peers after the recent run-up investors booked profits.