In the past five trading sessions, Indian stock markets have seen a significant erosion of investor wealth, with around ₹13 lakh crore wiped out, according to data from the Bombay Stock Exchange (BSE).
As per the data, last week, the total market capitalization of Indian stocks stood at ₹479 lakh crore. However, as of this week, that figure has fallen to ₹466 lakh crore, reflecting a sharp loss of ₹13 lakh crore in just five sessions.
Both key indices, the Nifty and the Sensex, have been under constant selling pressure, declining more than 4 per cent each in the last five trading days. This sustained drop has dampened investor sentiment, following a period of strong market performance.
Last Friday, the markets had reached a high point, with the Sensex hitting a 52-week high of 85,978.25 points, and the Nifty 50 index reaching 26,277.35 points.
The rally last week was largely driven by the announcement of a rate cut by the U.S. Federal Reserve. This decision made Indian markets more attractive to global investors, leading to an influx of foreign investments, particularly in equities. As a result, both the Nifty and Sensex touched record highs, reflecting the optimistic outlook among investors.
However, since the start of this week, Indian stock markets have been facing mounting selling pressure. Market experts have pointed to several factors contributing to this downturn. Rising geopolitical tensions, particularly the conflict between Iran and Israel, have created uncertainty in global markets. This has led to a cautious approach among investors, with some opting to move funds out of India.
“Approx ₹13 Lakh crore has been wiped off from the BSE over 4 days which makes it to approx 2.71 per cent correction. But the BSE Sensex fell to 82497 from 85474 which makes it to 3.48 per cent which is bigger than the fall in mkt capitalisation. Shows that selling has come more into the large caps based on news but overall market fell less” said said Vivek Karwa, VRIDHI Investment.
Additionally, foreign investors have shifted their focus towards China and Hong Kong as alternative investment destinations, further pressuring Indian markets. Another factor contributing to the decline is the recent decision by the Securities and Exchange Board of India (SEBI) regarding changes in the Futures & Options (F&O) market, which has added to the negative sentiment.
As these factors continue to weigh on market performance, investors remain watchful for signs of stability in the coming sessions.