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Rs 9 lakh crore investor wealth wiped out from record high: Here's what to expect after massive market correction

In four sessions, Sensex has tumbled 2,915 points to 47,269 (intra day low) from record high of 50,184. Similarly, Nifty crashed 824 points from its all-time high of 14,753 hit on January 21

Aseem Thapliyal | January 27, 2021 | Updated 19:15 IST
Rs 9 lakh cr investor wealth wiped out from record highs: What to expect ahead after massive correction
Profit booking, mixed global markets and pre-budget nervousness among traders and investors contributed to the decline of benchmark indices from record highs.

Investors have lost a massive Rs 9.39 lakh crore from record highs in four sessions. Market wealth, which rose to Rs 199.02 lakh crore on January 21 declined to Rs 189.63 lakh crore on BSE today. In four sessions, Sensex has tumbled 2,915 points to 47,269 (intra day low) from record high of 50,184. Similarly, Nifty crashed 824 points against its all-time high of 14,753 hit on January 21.

Profit booking, mixed global markets and pre-budget nervousness among traders and investors contributed to the decline of benchmark indices from record highs.

In the previous session, Sensex ended 530 points lower at 48,347 and Nifty fell by 133 points to 14,238.

Today, benchmark indices ended lower amid profit-booking in heavyweight stocks. In line with weak global equities, Sensex ended 937 points lower at 47,409 and Nifty lost 271 points to 13,967. Investor wealth fell by Rs 2.6 lakh crore on BSE.

On Nifty, Tata Motors was the top loser falling 4.44% to Rs 266.75. Tata Steel, Titan and IndusInd Bank were other losers falling up to 4.28% on the 50-stock index.

Mid cap index on BSE lost 255 points to end at 18,292. The small cap index too fell 95 points to close at 18,115.

Sensex ends 937 points lower, Nifty below 14K: Five factors that led to the correction

Banking stocks led the losses with Bank Nifty closing 913 points lower at 30,284 against previous close of 31,198. Consumer durables stocks were also among top losers with their BSE index ending 511 points lower at 30,292.

Market breadth was negative with 1,899 stocks ending lower against 981 ending higher on BSE. 148 stocks were unchanged.

Number of shares rising to their 52-week highs stood at 147 against 42 touching their 52-week lows. Tracking the negative sentiment in the market, 217 stocks hit their upper circuits against 332 falling to their lower circuits, respectively. 

Share Market Highlights: Sensex ends 937 points lower, Nifty at 13,967; Axis Bank, IndusInd Bank top losers

Here's a look at analysts' expectations from the market in days ahead after the steep fall.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said, "We are approaching monthly expiry on Thursday and on a monthly basis, the market has erased all the gains despite the Nifty/Sensex moved to 14750/50185. Certainly, it is negative for the market in the medium term (1 to 3 weeks). However, in the short term, we could see relief rally from 14000/13900 (47500/47200) levels. The strategy should be to buy at current levels and keep a final stop loss at 13700/46500 (50 DAYs SMA) for the same."

Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities said, "If Nifty-50 sustains below 14,000 for the next two days that the probability of it testing 13,000 goes up. We need to wait for tomorrow's expiry closing to test whether Nifty-50 sustain the 14,000 mark."

 Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking said, "It is rare to see market giving trend reversal ahead of the major event, but looking at today's close, further correction looks on cards. We continue to remain cautious and advice using bounce back to go short with a momentum perspective. For the coming session, 14,100 followed by 14,200 are to be seen as immediate hurdles; whereas on the flipside,  13,850 - 13,772 are the levels to watch out for.

Since the much awaited correction has come before the event, things have become extremely tricky now. It would be difficult for both counter parties (Bulls and Bears) to carry their positions on the event day as both would find themselves stranded in the middle of the ocean."

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