Market wealth worth Rs 1,06,838 crore (Rs 1,068.38 billion) was eroded on Monday as the 30-scrip BSE Sensex reported a record fall of 400 points in a single day, the highest in the last six months.
The market capitalisation of stocks traded on the BSE declined by 2.96 per cent from Rs 36,07,394 crore (Rs 36,073.94 billion) on Friday to Rs 35,00,556 crore (Rs 35,005.56 billion) on Monday.
The BSE Sensex declined 2.89 per cent, the largest single-day fall after May 8, 2006. In the last two trading days, the Sensex has declined by 4 per cent (572.60 points) from the level 13,972.03 on December 7 to close at 13,399.43.
Out of the 2,766 actively traded stocks, 68 per cent or 1,889 stocks reported a fall in their market price, while 520 gained and 359 remained unchanged. Of these, 193 stocks were frozen at the lower circuit filter and 153 hit to the upper circuit filter.
The market price of 63 stocks declined more than 10 per cent each from the previous day's level, while 628 stocks fell in the range of 5 per cent to 10 per cent.
Bankex, the banking index, was the largest loser among the sectoral indices after the Reserve Bank of India (RBI) increased the cash reserve ratio (CRR) rate.
The Bankex recorded the highest-ever, single-day fall since its inception. The index fell by as much as 6.43 per cent (463.96 points) to close at 6,749.78 on Monday against the Friday's close of 7,213.74.
The banking sector eroded Rs 21,959 crore (Rs 219.59 billion) of investors' wealth in a single day. The total market capitalisation of 38 banking stocks declined from Rs 3,36,810 crore (Rs 3,368.10 billion) on Friday to Rs 3,14,851 crore (Rs 3,148.51 billion) on Monday. Most of the banking shares plunged in the range of 5 per cent to 10 per cent.
State Bank of India (SBI) scrip fell by 8.2 per cent at Rs 1,242.75 against its previous close of Rs 1,353.50. ICICI Bank scrip declined 6.5 per cent at Rs 819.40 (Rs 876.70) and HDFC Bank scrip dropped 4.7 per cent at Rs 1,034 (Rs 1085.05).
IndusInd Bank, the largest loser, fell by 11 per cent, while Bank of India declined 10 per cent. BoB, Punjab National Bank, Canara Bank, Syndicate Bank, Corporation Bank and Federal Bank declined more than 8 per cent each.
The metal index was the second biggest loser, declining by 4 per cent at 8,679.74 points (9,041.19), while the consumer durables index fell by 3 per cent to 3,231.45 points (3,337.69), the automobiles index dropped 2.8 per cent at 5,244.04 points (5,393.16), with the FMCG index losing 2.4 per cent at 1,972.08 points (2,020.63).
The market capitalisation of NTPC, SBI, ICICI Bank, Bharti Airtel, Reliance Industries, Reliance Communications and BHEL fell by over Rs 2,500 crore (Rs 25 billion) each.<hr>
'Fall was expected'
Motilal Oswal, chairman, Motilal Oswal Securities:
"The markets were clearly in an overbought zone. The correction is healthy, though it (correction) may last a day or two. These days, the action and reactions happen quickly. The CRR hike impact is now discounted."
Andrew Holland, head of strategic risk group of DSP-Merrill Lynch:
"I don't see a global factor for Monday's fall. The rest of the markets globally are doing okay. The Indian markets have gone up a lot this year. I don't think this (Monday's fall) was totally unexpected. There is no reason for panic"
Deven Choksey, managing director of KRC Shares and Securities:
"CRR cut as well as lack of buying by overseas investors ahead of Q3 results and (foreign investors) vacation has triggered Monday's fall in market. Going forward, 13,200 and 13,000 level for Sensex offer very good support and at that level some upside correction can be expected. Fresh buying may come in January and till then market may remain sideways but May-like fall is ruled out."
Lalit Thakkar, Director- Reasearch Angel Broking:
"In the last few days, retail investors have entered in the F&O segment and when triggered by CRR hike, market started falling they unwound the positions to avoid more losses. One or two per cent fall may be expected from this level before market bottom outs. 3800 is strong support for Nifty. Fundamentally speaking due to CRR hike, growing economy will find it difficult to get required liquidity and interest rate will also go up. But in market foreign fund may keep coming in and could provide required support to the market."
