Sensex tanks 1,635 points, investors lose nearly ₹10 lakh crore
What's the story
The Indian equity markets witnessed a massive sell-off on Monday, with the Sensex crashing over 1,600 points and the Nifty falling below the crucial 22,400 mark. The Sensex plummeted by 1,635.67 points or 2.22% to close at 71,947.55 while Nifty50 fell by 488.20 points to settle at 22,331.40 in one of its biggest single-day falls in recent times. Investor wealth eroded by ₹10 lakh crore as BSE market cap shrinked due to today's crash.
Currency impact
Rupee breaches 95 per dollar
The market crash was exacerbated by the Indian rupee hitting a record low against the US dollar. The currency fell to an all-time intraday low of 95.12 before closing at a historic low of 94.83, weaker than Friday's close of 94.81. The sharp depreciation in the rupee weighed heavily on investor sentiment, raising concerns over imported inflation and external vulnerabilities, particularly amid elevated crude oil prices and continued foreign fund outflows.
Market response
Metal stocks lead market selloff
The market witnessed broad-based selling, with metal stocks leading the losses amid fears of global demand and commodity price volatility. Financial stocks also remained under pressure, dragging broader indices lower. The weakness extended to midcap and smallcap segments, reflecting a risk-off mood in the market. However, some stocks like AIA Engineering, Thermax, and EPL managed to post gains of over 3% each due to stock-specific factors and relatively defensive positioning.
Market outlook
Analysts expect markets to remain cautious
Market participants have attributed the decline to a mix of factors such as persistent foreign institutional investor outflows, the sharp fall in the rupee, rising crude oil prices, and prevailing global uncertainties. With currency volatility and external risks remaining elevated, analysts expect markets to stay cautious in the near term. The direction of the rupee and global cues are likely to remain key drivers of sentiment.