Stock market crash: As investors shied away from riskier investments due to worries about global economic growth on Friday, equity indexes collapsed, extending losses for the third straight day and highlighting the effect of the anticipated tighter monetary policy route by major central banks.
The wide NSE Nifty index fell 302.45 points to 17,327.35, while the BSE Sensex index fell 1,020.80 points to close at 58,098.92.
Power Grid saw the largest decline among the Sensex’s 30 stocks, dropping 7.93%. Among the other notable laggards were Mahindra & Mahindra, State Bank of India, Bajaj Finserv, Bajaj Finance, NTPC, HDFC, and IndusInd Bank.
Just Sun Pharma, Tata Steel, and ITC had growth.
The market’s selling pressure has caused investors’ wealth to decline by more than 4 lakh crore.
Asian equities limped toward a fourth straight weekly loss on Friday, while bonds saw substantial losses as investors scrambled to stay up with the US Federal Reserve’s interest rate prediction.
Many funds that were flowing into developing markets may return as a result of the Fed’s action, Saurabh Jain, Assistant Vice-President for Research at SMC Global Securities, told Reuters.
Refinitiv Eikon statistics show that foreign investors purchased Indian shares worth $819 million last week before selling them for $152 million this week as of Thursday.
After Fed Chair Jerome Powell made it plain that bringing down inflation will be painful, MSCI’s world stock index fell by around 12% during the past month. The indicator fell to its lowest point on Friday since the middle of 2020.
Losses in businesses ranging from natural resources and technology to bank stocks added to the sea of red on European bourses for a second day, putting them on course to join Wall Street benchmarks in entering a bear market.
The market is firmly, and almost exclusively, focused on how high rates will rise across developed markets, and how long they will remain at those peaks, CaxtonFX chief strategist Michael Brown told Reuters. Everything else, aside from inflation data and central bank policy decisions, is essentially just noise right now.
It’s nearly impossible to be long stocks or want to buy Treasuries in that environment, so the sell-off in both is not surprising and should continue. The Fed’s message on Wednesday was clear: rates are rising faster than the market was pricing them, and policy will remain restrictive for a significant amount of time to come, probably throughout 2023.
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