Investors lost Rs 1.31 lakh crore in the equity market sell off today after Sensex and Nifty closed in the red following weak global cues.
Market cap of all BSE-listed firms fell to Rs 233.15 lakh crore in the current session against a record high of Rs 234.46 lakh crore on July 16, thereby eroding investor wealth by Rs 1.31 lakh crore.
In the last session, Sensex hit its all-time high of 53,290 and Nifty touched a record high of 15,962.
On July 16, indices closed flat, bringing to halt a rally in Sensex and Nifty powered by Q1 earnings and positive economic data.
Nifty gained 231 points in five sessions to July 16 and Sensex rose 371 points in four sessions as IT stocks gave a thumbs up to Q1 earnings of Wipro and Infosys last week.
However, virus fears returned to haunt global markets this week as rising cases of Delta variant of Covid-19 threatened to derail global economic recovery.
Reacting to the global sell-off, Sensex closed 586 points lower at 52,553, slipping the most in nearly three months. Nifty fell 171 points to 15,752 today.
Throwing light on the factors behind market crash, Vinod Nair, Head of Research at Geojit Financial Services said,"Shadowing global sell-off, Indian indices slipped succumbing to world inflation woes, FOMC meeting next week and rising covid cases.
Banks led the domestic downtrend as initial quarterly results pointed to cautious asset quality due to the impact of the second wave. Slackening economic growth in the US led to reports of likely downgrade in growth forecast in current year triggering global sell-off."
India VIX, the volatility gauge of Indian markets, surged 8.28% to 12.68 in today's session. The index opened at 11.70 and hit an intra day high of 13.19.
On how to play the market in short term, Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said,"The market failed to close above the support levels of 20 days SMA and EMA that was around 15,785 and 15,765 levels, respectively. On Tuesday, the market must hold above the levels of 15,600.
On the dismissal of the same, Nifty would fall to 15,500 and 15,450 levels. We need Nifty/Sensex to cross the levels of 15840 / 52850 levels for the bullishness in the market. Our advice is to buy in select stocks with a medium-term view."
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