With the broader market tumbling for the sixth straight day on global uncertainty, the market capitalisation of all BSE listed companies fell briefly below Rs 400 lakh crore mark on Wednesday. Six out of every seven stocks fell, with largecaps being no exception. Reliance Industries Ltd, Tata Motors Ltd, Asian Paints Ltd and Power Grid Corporation of India Ltd were among four Sensex stocks hitting their fresh 52-week lows.
In the largecap pack, Bank of Baroda, Canara Bank, Coal India, DLF, Hero MotoCorp, IndianOil, Jio Financial Services, PNB, REC, and REC Ltd also hit their one-year lows. A total of 274 stocks including TARC Ltd, Jai Corp Ltd and KPI Green Energy Ltd hit their lower circuits.
Historically, within a structural bull market, secondary corrections are common, said ICICIdirect. With the current 13 per cent correction in place, the market has approached both price-wise and time-wise correction levels, it said.
Structurally, since 2002, bull market corrections have averaged 14 per cent, while time-wise, the index has not recorded a negative monthly close for more than 3-4 months.
"Over the past four months, Nifty has corrected 13 per cent, absorbing pessimism around both global and domestic uncertainties, leading to bearish extreme readings on sentiment and momentum indicators, suggesting an impending pullback," the brokerage said.
Major cuts were seen in midcap and smallcap pockets, with the benchmarks falling up to 3 per cent in trade today. The ongoing stock market selloff has extended to the sixth trading session now, wiping a massive Rs 26 lakh crore off BSE market capitalisation in the process.
"Empirically over past two-decade Midcap corrections have been limited to 20 per cent, with the Current 17 per cent correction in place, downside appears limited. Additionally, the breadth indicator (% of stocks above 50 days SMA of Nifty 500 Universe) has reached at bearish extreme level of 9. Since covid lows, such an extreme reading leads to short term reversal," ICICIdirect noted. Inflation is set to rise in the US, said market observers, with the US Federal Reserve in no hurry to cut rates. This has helped 10-year US treasury bond yields (4.55 per cent) and dollar index to maintain recent gains. Trump tariffs are adding fuel to the fire.
There are concerns rupee may depreciate further, leading to foreign outflows that already touched Rs 88,000 crore in 2025 so far. FIIs were net seller of Rs 4,486.41 crore worth of equities on Tuesday, provisional NSE data showed.
Akhil Puri, Partner, Financial Advisory, Forvis Mazars in India said disappointing Q3 earnings from Indian companies across sectors such as consumer staples, automobiles, and building materials have compounded investor concerns. The looming threat of a global trade war, exacerbated by the US's recent 25 per cent tariff hike on steel and aluminium imports, as well as its plans to implement 'reciprocal tariffs' on other countries, has raised alarms.
"These measures could negatively impact emerging markets in Asia, including India, China, and Thailand," he said.