Investors lost nearly Rs 6 lakh crore on an intra day basis today after Sensex and Nifty witnessed across the board selling due to a record surge in coronavirus cases in the country. Market cap of BSE-listed firms fell by Rs 5.82 lakh crore after investor wealth declined to Rs 199.89 lakh crore against Rs 205.71 lakh crore in the previous session.
Widespread selling on the mid cap and small cap counters also hit market sentiment. BSE mid cap and small cap indices declined 464 points and 406 points, respectively in trade today.
Indicating heightened volatility in the Indian equity market, India VIX , the market's volatility gauge, rose 10.59% to 22.56 on Monday.
The market sentiment deteriorated after three consecutive sessions of gain after India on Monday recorded the biggest-ever spike of 2.73 lakh fresh coronavirus cases and 1,619 deaths in the last 24 hours, as per data from Union Health Ministry.
This led the Sensex to slip 1,470 points intra day to 47,362 against previous close of 48,832.
Nifty too crashed 426 points intra day to 14191 against previous close of 14,617.
AR Ramachandran, Co-founder & Trainer at Tips2Trades said, "Rising Covid cases in India coupled with death rates moving up have completely dampened investor sentiment leading to a sharp fall in our major indices. Technically, if Nifty closes below 14192, we could see 14,000 breached and possibly 13,800 very soon. Till Nifty doesn't close above 14650, trend would remain sideways to bearish."
Rusmik Oza, Executive-VP, Head of Fundamental Research at Kotak Securities said, "Markets are reacting to concerns of fresh lockdowns and restrictions likely to come in more states and cities. This could derail the V-shaped recovery and also impact earnings forecasts. The rise in Covid case and positivity rates across states suggest a very grim outlook for the next 2-3 months. We do not rule out some downgrades to FY22E earnings but at the same time last year's low base can provide some surprise element.
Given the near-term challenges and sentiment, we can expect FPI flows to remain subdued in the near term. Nifty is still not out of the woods as it continues to trade below the 50 DMA placed at 14,864. If the Covid situation escalates beyond proportion and sustains for a long time, then we can expect Nifty-50 to go down to either 13,600 or 13,000 levels in the near future."