The sensex recovered some ground in the mid-session after starting the day with a loss of nearly 1,800 points, but a late-session selloff pushed it below the 55K level, and it closed at 54,530 points, down 2,702 points, its fourth largest single-session loss ever. A few other data points could be used to assess the market’s impact on the day: All 30 equities on the Sensex finished in the red, while nearly 15 stocks in the broader market ended in the red for every one that finished higher.
The news: The day’s selloff also left investors with a loss of Rs 13.5 lakh crore, the second-largest one-day loss after Rs 14.2 lakh crore on March 23, 2020, with BSE’s market capitalization currently at Rs 13.5 lakh crore.
- As the Russian attacks on Ukraine began, other markets and most other assets saw extreme volatility around the world. Around Asia, Hong Kong’s Hang Seng fell 3.2 per cent, while Japan’s Nikkei fell 1.8 per cent and China’s Shanghai Composite fell 1.7 per cent.
- The DAX in Germany was down 4.5 per cent in late dealings, while the FTSE in the UK was down 2.8 per cent. As war-related fears gripped Russia’s economically troubled country, the Moscow stock index plummeted about 50 per cent intraday, and trading was halted.
- In the United States, the Dow Jones and S&P 500 indices both opened approximately 2 per cent lower.
- Outside of markets, the rupee had depreciated by 108 paise versus the US dollar, Bitcoin was down over 8 per cent at approximately $35,500, gold was up over 2.5 per cent to $1,959 per ounce, and Brent crude was up 8.2 per cent to almost $105 per barrel. While gold is at a more than a year high, crude oil is approaching an eight-year high.
- Investors sought safe haven assets like gold, the US dollar, and US government bonds as a result of the war-related uncertainty. As a result, the dollar gained ground against most currencies, while 10-year US government bond yields fell to 1.87 per cent. This yield was at 2.07 per cent just a week ago, which was a multi-year high.
- It’s difficult to predict how long the volatility will last, according to fund managers. In a circumstance like war, Nilesh Shah, group president and MD of Kotak Mahindra Mutual Fund, says it’s tough to anticipate the market’s bottom.
- “The movement will be shaped by events,” Shah stated. “Following asset allocation guidelines is the finest thing an investor can do. In the short run, this is going to be a buy-on-dip market with a lot of volatility.” RIL, HDFC Bank, and ICICI Bank contributed the most to the day’s decline among the sensex stocks.
According to BSE data, foreign portfolio investors (FPIs) led the selloff, with a net outflow of Rs 6,448 crore. According to figures from CDSL and BSE, the day’s net selling brought the current month’s figure close to Rs 31,000 crore and the current year’s figure to Rs 64,222 crore. Domestic funds also bought Rs 7,668 crore worth of stocks on the day’s data, but it wasn’t enough to stop the selloffs.