Sixth consecutive day of losses in stocks; loss of Rs 3.17 trillion in a single day

Thursday’s sell-off in stocks marked the sixth straight session as investors made a beeline for the exit. Although crude oil prices have decreased and Brent was trading at less than $90 per barrel, investors withdrew their money due to concerns that the conflict in West Asia would last for a long time. Investor anxiety was heightened by elevated US Treasury yields, the potential for more rate hikes by the US Federal Reserve, and a muted start to the earnings season.

The Sensex closed at 63,148.15, down 900.91 points. The entire depreciation of capital over the last six sessions was a staggering Rs.17.8 trillion, with investor wealth losing out on Thursday alone amounting to Rs.3.17 trillion. The Sensex has lost over 7% since its peak on September 15.

For the first time since June 30, the wider Nifty fell 284 points to settle at 18,857.25. This was below the critical 19,000-mark. The Nifty has now dropped 6.6% from its peak in September. India continues to rank among the priciest markets among its peers, even after the crash.

Foreign Portfolio Investors (FPIs) sold a net of $1.3 billion in stocks in October through Wednesday, after selling a net of $2.2 billion in September. FPIs sold for a total of Rs.7,702 crore on Thursday, according to preliminary data from the exchanges, while Domestic Institutional Investors (DIIs) contributed a net amount of Rs.6,558 crore. Up till Wednesday, DIIs had invested Rs.19,713 crore in stocks.

The selling has been widespread rather than limited to the biggest equities, as evidenced by the advance-decline ratio falling below 0.7 in five of the last six sessions. Following a six-session decline of 5.9% and 6.2%, respectively, the BSE Mid-Cap and Small-Cap indices fell 2.2% and 2.9%, respectively, on Thursday.

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