The sharp fall in Sensex and Nifty on Monday amid a huge selloff in the global equities saw domestic investors losing more than Rs 6.50 lakh crore. Today's slump in the indices is the sixth out of seven sessions.
According to BSE data, the market capitalisation of all listed companies fell by Rs 6.74 lakh crore to Rs 245.10 lakh crore from Rs 251.84 lakh crore on Friday. At the closing, the market capitalization of all BSE listed companies was at Rs 2,45,10,029.92.
After gap down opening, the 30-share BSE benchmark further plummeted as it cracked 1456.74 points or 2.68% to settle at 52,846.70. Similarly, Nifty tanked 427.40 points or 2.64 per cent to close at 15,774.40.
Earlier on Friday, Wall Street had ended sharply lower after the inflation data spooked investors. Inflation in the US has hit a 40-year-old of 8.60 per cent, according to the data released last week. The higher rate of inflation has worried investors that the Federal Reserve may aggressively hike key rates.
Banking, IT stocks drag
Banking, financial service and IT stocks were the worst hit in today's session. Bajaj Finserv, Bajaj Finance, ICICI Bank, State Bank of India, Kotak Mahindra Bank, Tech Mahindra and IndusInd Bank emerged as the major laggards. Weakness in index major Reliance Industries also dragged the market.
Bajaj Finserv tumbled 6 per cent while Bajaj Finance crashed 5.27 per cent to Rs 5369.10. IndusInd Bank slumped 5.32 per cent to Rs 869.70. ICICI Bank lost around five per cent. State Bank of India dipped 3.51 per cent to Rs 445.60. There was heavy selling pressure in IT stocks. TCS slumped around four per cent. Tech Mahindra was trading 4.37 per cent down. Infosys was down 3.53 per cent.
Right time to invest?
Rahul Shah, co-head of research at Equitymaster, said as soon as the Sensex PE multiple falls below 20x, the markets start looking very attractive from a 2-3 year perspective. This is the level where you can again dream of earning returns in the region of 16%-18% per annum over the long term.
"There’s very little chance you would lose money over a 2-3 year period if you buy at market PE multiple of around 18x-20x and stick to quality names, be it large caps or small caps. From a sectoral perspective, it would make sense to look at sectors that are more domestic oriented like auto, capital goods and the whole defence space," he said.