Stock market crash wipes out ₹14 lakh crore from investors kitty

Dalal Street investors were a poorer lot on Monday as their wealth eroded sharply by ₹14 lakh crore following a sharp decline in benchmark indices amid a global market meltdown due to recession fears.

The 30-share BSE Sensex tumbled 2,226.79 points or 2.95% to settle at 73,137.90. Intra-day, the benchmark slumped 3,939.68 points or 5.22% to 71,425.01.

Mirroring the bearish trend in equities, the market capitalisation of BSE-listed firms declined sharply by ₹14,09,225.71 crore to ₹3,89,25,660.75 crore ($ 4.54 trillion) in a single day.

At one point during the morning trade, investors' wealth eroded sharply by ₹20.16 lakh crore.

All Sensex firms, except for Hindustan Unilever, ended lower. Tata Steel fell the most by 7.73% followed by Larsen & Toubro which cracked 5.78%.

Tata Motors, Kotak Mahindra Bank, Mahindra & Mahindra, Infosys, Axis Bank, ICICI Bank, HCL Technologies and HDFC Bank were the other big laggards.

Hindustan Unilever ended marginally higher.

In Asian markets, Hong Kong's Hang Seng index tanked more than 13%, Tokyo's Nikkei 225 plunged nearly 8%, the Shanghai SSE Composite index dropped over 7% and South Korea's Kospi sank over 5%.

European markets too came under heavy selling pressure and were trading with over 4% decline.

US markets ended significantly lower on Friday. The S&P 500 tanked 5.97%, the Nasdaq composite slumped 5.82%, and the Dow tumbled 5.50% on Friday.

"Benchmark indices plunged on Monday as global markets across the world crashed on the escalating trade war. Global markets are witnessing a deepening rout with sell-offs across the regions and asset classes. Markets opened at steep losses with Nifty-50 opening below 22k after Asian indices from Japan to Korea to China had witnessed record losses and US futures indicated another session of steep drawdown," Satish Chandra Aluri, Analyst, Lemonn Markets Desk, said.

Recession was not a base case until last week, but it is quickly becoming the base case for markets, as they quickly price in the recession risks with global economic/trade order expected to undergo a dramatic shift, he added.

Global oil benchmark Brent crude dropped 2.30% to $64.11 a barrel.

The BSE smallcap gauge cracked 4.13%, and the midcap index tanked 3.46%.

"After US markets plunged on Friday, it was writing on the wall for other global equity indices which fell like a pack of cards amid fears that Trump's policies on reciprocal tariffs may lead to recession and higher inflation in the US going ahead.

“Already, commodity prices of crude oil and several metals are seeing a downward slide, which is an indication of a slackening demand if the current trend persists," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

All BSE sectoral indices ended with deep cuts. Metal tumbled 6.22%, realty dropped 5.69%, commodities (4.68%), industrials (4.57%), consumer discretionary (3.79%), auto (3.77%), bankex (3.37%), IT (2.92%), teck (2.85%) and BSE Focused IT (2.63%).

As many as 3,515 stocks declined while 570 advanced and 140 remained unchanged on the BSE. Notably, 775 stocks hit their 52-week lows while 59 firms were at 52-week peaks on the BSE.