Stock market crash: Investors lose over Rs 10 lakh crore in just 2 sessions

Equity investors lost over Rs 10 lakh crore in a two-day selloff on Dalal Street that sent the benchmark BSE Sensex falling 2,520 points to sub-56,500-mark on Monday. The 30-share index closed at 56,405.84 on February 14 against 58,926.03 on February 10.

Amid the ongoing selloff, investors have lost Rs 12.43 lakh crore in wealth, with the combined market cap of BSE falling to Rs 255.38 lakh crore from Rs 267.81 lakh crore on Thursday last week.

Commenting on the factors that dampened sentiment, Mohit Nigam, head-PMS, Hem Securities said, “There is a short-term negative sentiments in the markets due to Ukraine-Russia crisis tensions, rising crude oil prices and US Fed’s aggressive rate hike expectations due to decade-high inflation. But we believe the current fall in the market is due to Ukraine crisis and we may witness a strong rebound in markets after easing of Ukraine crisis.”

All the 50 stocks in the Nifty index also witnessed a fall in their share prices during the past two sessions. With a fall of 8.04 per cent, HDFC Life Insurance emerged as the top loser in the index. It was followed by Housing Development Finance Corporation (down 7.50 per cent), State Bank of India (down 7.46 per cent), Tata Motors (down 7.18 per cent). UPL, Shree Cement, Kotak Mahindra Bank, JSW Steel, ICICI Bank, ITC, Tech Mahindra, Larsen & Toubro, Bajaj Finance, Ultratech Cement, Adani Ports, Tata Steel and Maruti Suzuki also declined over 5 per cent.

Sharing her investment strategy amid the ongoing uncertainty in the equity market, Amisha Vora, joint MD, Prabhudas Lilladher said, “Investment strategy will have to be a bit defensive by bringing value strategy in the portfolio for only growth and momentum stocks. For portfolio sectoral allocation, investors can focus on private and select public sector banks where the balance sheet is totally clean. One can also zero in on capital goods sector which is aided by China plus one and PLI scheme, residential real estate, housing improvement companies and infrastructure companies.” The market watcher prefers players like ICICI Bank, L&T, ABB, Lakshmi Machine Works and Praj Industries for the next 3-5 years.

Sectorwise, the BSE Realty index plunged over 7 per cent in the past two trading sessions. Banking, Telecom, Metal and Capital Goods indices also retreated over 5 per cent during the same period. Broader indices including the BSE Midcap and BSE Smallcap also lost 5.29 per cent and 5.97 per cent, respectively, since February 10.

VK Vijayakumar, chief investment strategist, Geojit Financial Services added that the element of uncertainty is very high. If the Ukraine crisis aggravates into conflict it can inflict damage to the market in the short run. The consequences of severe sanctions on Russia in the event of a Russian invasion can be debilitating for the Russian economy. This may restrain Putin from misadventure in Ukraine.

“Long-term investors who can ignore the present short-term gyrations can buy high-quality financials and IT stocks now,” Vijayakumar said.