SENSEX, NIFTY Fall For Fourth Straight Session; ₹17.81 Lakh Crore Wiped Out - Upstox

Indian equity benchmarks SENSEX and NIFTY extended their losing streak for a fourth straight session on Wednesday, as a broad-based sell-off wiped out market capitalisation worth ₹17.81 lakh crore. The continued decline has left investors cautious amid a volatile global environment and persistent foreign fund outflows. According to analysts, the fall is driven by a combination of global headwinds, including rising bond yields in the US and concerns over geopolitical tensions, which have prompted risk-averse behaviour among market participants.

The SENSEX and NIFTY have now declined in four consecutive trading sessions, marking one of the longest losing streaks in recent months. The market capitalisation erosion of ₹17.81 lakh crore reflects the widespread selling pressure across sectors, with banking, IT, and auto stocks among the worst hit. Analysts say that the sharp correction is largely due to profit-booking after a strong rally earlier this year, coupled with subdued earnings expectations for the September quarter.

"The ongoing correction is a healthy sign for the markets as it helps in cooling off overheated valuations. Investors should focus on long-term fundamentals rather than short-term volatility," analysts say.

Foreign institutional investors (FIIs) have been net sellers in the Indian equity markets, adding to the downward pressure. According to provisional data, FIIs sold equities worth thousands of crores in the last few sessions. Domestic institutional investors (DIIs), however, have been providing some support by buying on dips. The tug-of-war between FIIs and DIIs has resulted in heightened volatility, with the India VIX (volatility index) rising significantly.

Here is a snapshot of the market performance over the last four sessions:

Note: The above figures are indicative based on the total market cap loss of ₹17.81 lakh crore as reported by Upstox. The exact daily breakdown may vary.

Analysts attribute the fall to multiple factors. First, the US Federal Reserve's hawkish stance on interest rates has strengthened the US dollar, leading to capital outflows from emerging markets like India. Second, crude oil prices have been rising, which could impact India's fiscal deficit and inflation. Third, the ongoing tensions in the Middle East have added to global uncertainty. On the domestic front, the monsoon's uneven progress and its impact on rural demand are also concerns.

Sector-wise, the banking sector has been the biggest drag, with major private and public sector banks witnessing selling pressure. IT stocks have also fallen due to fears of a slowdown in global tech spending. Auto stocks declined on worries over rising input costs and potential demand slowdown. However, pharma and FMCG stocks have shown some resilience, with defensive buying seen in these sectors.

Looking ahead, analysts suggest that the market may continue to remain volatile in the near term. The upcoming earnings season and global cues will be crucial in determining the direction. Investors are advised to stay cautious and avoid leveraged positions. Long-term investors can use this correction as an opportunity to accumulate quality stocks at attractive valuations.

For more detailed market analysis and updates, visit markettomoney.co.in.