Sensex drops by more than 600 points, costing investors around Rs 4 lakh crore

Due to a significant intraday decline in the benchmark indexes, the S&P BSE Sensex and NSE Nifty50, investors on Dalal Street suffered losses of around Rs 4 lakh crore on Tuesday.

In late morning trade, the Nifty50 fell by 186 points, or 0.84 percent, to reach 21,869, while the Sensex fell by 587 points, or 0.81 percent, to 72,161.

This drop was mostly caused by the weakness seen in the oil, IT, and consumer sectors.

The market capitalization of the Bombay Stock Exchange saw a decline of around Rs 3.8 lakh crore. More specifically, the market capitalization of the BSE dropped from Rs 378.79 lakh crore in the previous session to Rs 374.93 lakh crore, a reduction of Rs 3.86 lakh crore.

TCS and Reliance witness sharp declines
The decline in the stock market was caused by a number of well-known companies, including Tata Consultancy Services Ltd. (TCS), Reliance Industries Ltd. (RIL), L&T, Infosys, HUL, ITC, Nestle India, HCLTech, and Tata Motors.

Energy, IT, and consumer stocks all saw declines. The National Stock Exchange’s (NSE) 15 sector gauges were all trading down, with notable falls seen in sub-indices such as Nifty FMCG, Nifty Consumer Durables, Nifty IT, and Nifty Oil & Gas.

The largest Nifty decliner, TCS, fell by almost 3% as a result of Tata Sons’ announcement of a share sale valued at more than Rs 9,000 crore at a 3.7% discount. This move also had an effect on the IT index (Nifty), which fell 1.85%, the highest of all the key sectors.

International cues also affected the performance of the market. Since yesterday, US rate-sensitive IT equities have been underperforming as recent higher-than-expected inflation data has dimmed the prospects of a Federal Reserve rate drop. Following suit, Asian markets closed ahead of the Fed’s announcement.

According to exchange statistics, domestic institutional investors (DIIs) purchased shares worth Rs 2,260.88 crore during the previous session, while foreign institutional investors (FIIs) sold shares worth Rs 2,051.09 crore on a net basis. Higher volatility was also brought on by this on Dalal Street.

Choice Broking research analyst Deven Mehata said, “We can witness profit booking from higher levels with the selling pressure by FIIs.” The robust support levels are also being respected by Nifty and Bank Nifty. In such a range-bound market, traders are recommended to adopt a counter strategy, where purchasing on dips at support levels and selling close to the resistance might be beneficial.”