Rs 7 lakh crore investor wealth wiped out! Sensex tumbles 1,000 pts, Nifty gives up 25K; what's next?

Investors lost nearly Rs 7 lakh crore on Monday amid global markets rout after US and Israel carried out missile and drone strikes on Iran over the weekend. The retaliation by Iran led to widespread equity selling across the globe, lending heft to precious metals such as gold, regarded as a buffer during market routs. 

Sensex tumbled 1048 points to end at 80,238 and Nifty lost 313 pts to 24,865. This was the third straight session of fall for the equity market. Market cap of BSE-listed firms fell by Rs 6.97 lakh crore to Rs 456.94 lakh crore today against Rs 463.91 lakh crore on Friday.  

Shares of InterGlobe Aviation, L&T, Adani Ports, Maruti Suzuki, Asian Paints and Bajaj Finserv were the top Sensex losers, falling up to 6.25% on Monday. 

Bharat Electronics Limited (BEL), Sun Pharma and ITC were the only Sensex gainers, rising up to 2.09% amid the market crash today. 

As many as 94 stocks hit their 52-week highs today. On the other hand, 869 shares hit their 52-week lows on BSE.

Sectorally, metal shares were the only gainers with the BSE metal index rising 56 pts to 40,480. 

Consumer durables, auto and banking shares were the major losers with their BSE indices tanking 1359 points, 1388 pts and 814 pts, respectively. Among other major losers were BSE IT tanking 362 pts, BSE oil and gas crashing 635 pts and BSE oil and gas index tanking 636 pts. 

Commenting on the outlook of Nifty, Ajit Mishra – SVP, Research, Religare Broking said, "From a technical perspective, the sharp decline has pushed the Nifty closer to its swing low around the 24,600 level, and a decisive break below this could extend the correction towards the 24,400 mark. On the upside, the 25,000–25,250 zone is likely to act as an immediate hurdle in case of any recovery. Given the heightened volatility and global uncertainty, we reiterate our advice to maintain a cautious stance, keep position sizes light and focus on disciplined risk management."

Market breadth was negative with 821 stocks rising against 3561 stocks falling on BSE. 146 shares were unchanged. 

As Iran and US traded attacks, the former closed Strait of Hormuz, a passage for 20% of the global oil supply. 

Subsequently, brent crude oil price rose 12% to $81.89 per barrel, sending shares of OMCs, paints, chemicals into the red. The spike in oil also raised concerns about inflation, currency pressure and India’s import bill, which weighed on equities. 

Shrikant Chouhan, Head Equity Research, Kotak Securities said, "We are of the view that the current market texture is weak but oversold; hence, a technical bounce-back from the current level is not ruled out. For day traders, 24750/80,000  would act as a key support zone. As long as the market is trading above this, a pullback formation is likely to continue. On the higher side, it could bounce back till 25,000-25,075/80500-80700. On the flip side, below 24,750/80000 the market is likely to slip till 24,650-24500/79700-79300."

The ongoing US-Iran war also led to heightened volatility on Dalal Street today. India VIX, the volatility index, of the Indian stock market rallied 25.04% to 17.13 against 13.70 on Friday. 

Previous session 

Sensex and Nifty crashed in the last trading session of February amid negative global cues. Sensex tumbled 961 pts to 81,287 against the previous close of 82,248. Nifty closed 318 points lower at 25,178. Market cap of BSE-listed firms fell by over Rs 5 lakh crore to Rs 463.51 lakh crore.