The market?s worst fears, of inflation hitting double digits, finally became a reality on Friday, sparking off an across-the-board selling spree, which resulted in benchmark Indian indices ending the day at six-month lows. The 30-share Sensex of the BSE lost 516.70 points, or 3.42%, before finally closing the day at 14,571.29 points. The broader S&P CNX Nifty of the NSE dropped 130.20 points, or 2.89%, to end at 4,374.05 points.
The Sensex has steadily declined by 1,125.61 points (7.17%) to 14,571.29 on June 20 from 15,696.90 on June 17. It has eroded by 30.11% (6,302.04 points) from the calendar year?s highest level of 20,873.33, which it hit on January 8. The Nifty has also lost 305.45 points (6.57%) to 4,347.55, from 4,653.00, over the last four trading sessions.
During the same period, a staggering Rs 3,18,968 crore in shareholder wealth was wiped out in stocks listed on the BSE. The BSE?s total market capitalisation has declined to Rs 48,33,792 crore on June 20 from Rs 51,52,760 crore on June 17.
The double-digit inflation figure, which was way above market expectations, raised fears of a fall in corporate growth and profitability, prompting a sell-off in oil & gas, realty and metal sector stocks.
Sudip Bandyopadhyay, director & CEO, Reliance Money, said, ?Inflation at 11.05% is definitely worrying and is a complete negative surprise against the consensus expectation of 10-10.6% Market sentiment will definitely be impacted severely.?
On the BSE, a total 450 stocks advanced, 2,247 stocks declined and 43 remained unchanged. Among Sensex constituents, with the exception of ONGC, which gained 1.56% (Rs 866.85), all the other 29 stocks declined. All sectoral indices ended the day on a negative note.
Amitabh Chakraborthy, president-equity at Religare, however, struck a slightly optimistic note: ?I think that the worst is over now and the market may settle around this level.?