Mumbai, Oct 4: The Indian equity market experienced a significant downturn on Friday, driven by rising concerns over the escalating conflict in the Middle East. Investors collectively lost over Rs 14 lakh crore in just two trading sessions, as the total market capitalization on the Bombay Stock Exchange (BSE) dropped from Rs 475 lakh crore to Rs 461 lakh crore.
By the market close, the Sensex had fallen 808 points, or 0.98%, finishing at 81,688. The Nifty index also declined, losing 235 points, or 0.93%, to close at 25,014. Key contributors to the decline included Mahindra & Mahindra, Bajaj Finance, Nestle, and Reliance, while the IT sector provided some respite with gains from Infosys, Tech Mahindra, and Tata Consultancy Services.
The midcap and smallcap indices also faced selling pressure, with the Nifty Midcap index closing at 58,747, down 550 points (0.93%), and the Nifty Smallcap 100 index settling at 18,758, down 193 points (1.02%).
Across sectors, losses were broad-based, impacting auto, financial services, pharmaceuticals, FMCG, metals, real estate, energy, and services, while only the IT and PSU bank indices remained positive.
The India VIX, which gauges market volatility, increased by 7.21% to close at 14.12, indicating heightened investor uncertainty. Analysts suggest that the negative sentiment is likely to continue as investors opt for a sell-on-recovery approach amid rising crude oil prices, though an anticipated increase in OPEC production may provide some relief.
On October 3, foreign institutional investors (FIIs) sold equities worth Rs 15,243 crore, while domestic institutional investors (DIIs) purchased equities worth Rs 12,914 crore, reflecting the ongoing market unease and potential shifts toward more affordable markets like China.
