crash

Over ₹15 Lakh Crore Wiped Out, Stock Market Crash – Free PDF Download

What’s happening?

  • Benchmark indices, the BSE Sensex and the NSE Nifty ended in the red for the fourth consecutive day in what has been the worst weekly loss suffered by the stock markets since late November, wiping out Rs 10.17 lakh crore of investor wealth.
  • Since Tuesday, the BSE Sensex has shed more than 4000 points while NSE Nifty has lost more than 1000 points — or 5% each.

  • The stock market has lost over Rs 18 lakh crore of investor money during this period.
  • A cursory glance at market data shows, on Monday, out of every six stocks, five traded in the red.
  • Out of every four names, one hit the lower circuit.

  • According to market experts, weak rupee and FIIs fishing out money from the Indian markets have worked as major triggers for trend reversal and
  • Now corporate performance not coming as expected by Dalal Street has further cemented the bears grip on the markets.
  • They expect that the market may continue to remain weak as breakdown is visible in majority of the indices like real estate, Nifty smallcap, midcap, etc.

FII behind bears

  • Till 20th January 2022, FIIs have remained net seller to the tune of ₹12,415.14 crore whereas they have sold more than ₹4,500 crore on 21st January 2022.
  • These FIIs include Foreign Portfolio Investors (FPIs) too and this is also not allowing the market selloff to stop.
  • This marks the fourth straight month on FPI withdrawal Rupee vs dollar
  • In last one fortnight, Indian Rupee has fallen from 74 levels to around 74.50 levels, which is also a reason for FIIs fishing out money from the Indian markets,
  • As their return in dollar terms will go down drastically in this bear ridden market.

Below par corporate performance

  • Corporate results announced by market majors like CEAT, Asian Paints, etc. have been unable to meet the market expectations and
  • This is also a reason why bulls are unable to take over from bears.

Soaring inflation

  • Soaring global inflation is another concern that may put global economy under heat as crude oil prices have been surging sharply and it is expected to hit $100 in near term.
  • In that case, most of the global economies may not remain away from the heat of rising inflation.
  • In that case, investor may look at other asset class like gold and to some extent crypto as well.

Populist budget

  • Market is buzzing with reports that upcoming Union Budget 2022 will be a populist budget as 5 state assembly elections are taking place immediately after the budget presentation and Central government may try to win hearts of these state citizens in this budget.

What next?

  • Many analysts are also of the view that this weakness in the market is also an opportunity.
  • “India markets are definitely attractive. Corrections are welcome.
  • Those who are timing the market, they must consider the fall a good opportunity to buy.
  • Investors should stay invested in good quality stocks as fundamentals are extremely strong for the Indian market,” Choksey said.
  • There is a possibility of a sharp rebound in IT stocks as TCS share buyback may trigger fresh buying in the sector.
  • Singhal believes that the weakness in the Indian stock market may continue for 1-2 more sessions as a good number of quality stocks have given breakdown on chart pattern and much will depend on the Union Budget 2022. 
  • He further added that if someone is looking forward to take advantage of this continuous selloff, he or she should look at TCS shares.
  • “The large-cap IT stock is expected to announce share buyback that may trigger fresh buying in the new age IT stocks.”

Q) Which among the following is not part of Capital receipt?

  1. Recovery of loan
  2. Disinvestment
  3. Borrowing
  4. Tax

 

 

 

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