scorecardresearchMarket Wrap: Investors lose ₹3.2 lakh crore in a week; what should you do now?

Market Wrap: Investors lose 3.2 lakh crore in a week; what should you do now?

Updated: 04 Mar 2022, 04:47 PM IST
TL;DR.
Sensex ended with a loss of 769 points, or 1.40 percent, at 54,333.81. BSE Midcap and smallcap indices closed 2.36 percent and 2.36 percent lower, respectively. Investors got poorer by 3.2 lakh crore during the week as the overall market capitalisation of BSE-listed firms plunged to 246.8 lakh crore on March 4 against 250 lakh crore on February 25.
Most sectors suffered losses, with metal, auto consumer discretionary goods & services, consumer durables and realty packs falling more than 3 percent each.

Most sectors suffered losses, with metal, auto consumer discretionary goods & services, consumer durables and realty packs falling more than 3 percent each.

The domestic market ended in the red for the third consecutive session on March 4 as investors continued selling shares across sectors amid growing worries over the ongoing Russia-Ukraine war.

Investors' worries have been growing as crude oil prices are rising, pushing inflation much higher above the RBI's comfort level. Most analysts have started to see a long impact of the Russia-Ukraine war on the economy which is yet to recover from the Covid shock.

Sensex ended the session with a loss of 769 points, or 1.40 percent, at 54,333.81. The market, however, ended after trimming some losses as at one point during the session, Sensex was down as much as 1,215 points.

Dr Reddy's Labs, ITC, Tech Mahindra, UltraTech Cement and Sun Pharma were among the seven stocks in the 30-share pack Sensex that ended in the green. All these stocks rose between 1-3 percent. The stock of Titan, on the other hand, fell 5 percent and ended as the top laggard of the pack. Maruti Suzuki, Asian Paints and Mahindra & Mahindra also ended among the top laggards, falling between 4-5 percent.

Nifty closed the day at 16,245.35 with a loss of 253 points or 1.53 percent. BSE Midcap and smallcap indices closed 2.36 percent and 2.36 percent lower, respectively.

Most sectors suffered losses, with metal, auto consumer discretionary goods & services, consumer durables and realty packs falling more than 3 percent each.

For the week, Sensex lost about 3 percent while the Nifty50 fell about 2.5 percent. Mid and smallcaps outperformed the benchmarks on a weekly basis as the BSE Midcap index fell 2.3 percent and BSE Smallcap index fell just 0.62 percent for the week. Investors got poorer by 3.2 lakh crore during the week as the overall market capitalisation of BSE-listed firms plunged to 246.8 lakh crore on March 4 against 250 lakh crore on February 25.

"Global bourses are witnessing a sharp sell-off as reports of Russian attack on Europe’s biggest nuclear plant in Ukraine kept tension levels elevated. Rising oil prices along with uncertainties on supply change disruption have instilled fears that inflation could cross RBI’s tolerance level, though temporarily. The domestic market, however, trimmed its losses as buying was witnessed in IT and pharma stocks," said Vinod Nair, Head of Research at Geojit Financial Services.

What should investors do?

Volatility is likely to continue in the market at least till the Russia-Ukraine war continues. Analysts are advising to avoid riskier bets and focus on sectors such as metal and IT for the time being.

"In this highly volatile market exposed to heightened uncertainty, safety is in large-caps, particularly in segments like IT and metals," said VK Vijayakumar, Cheif Investment Strategist at Geojit Financial Services.

Ajit Mishra, VP - Research, Religare Broking, underscored that the main focus will remain on news related to the Russia-Ukraine war as further escalation would result in continued pressure in the coming week.

Rising crude oil is a concern for our economy and related sectors are already under tremendous pressure. Mishra feels it is time to remain selective and look for pockets that are fundamentally sound and likely to rebound quickly with stability in markets.

Technical indicators are showing the level of 16,000 as the crucial one for Nifty.

"Nifty slipped lower after a few days of consolidation on the daily timeframe which will heighten the possibility of falling below the 16,000 mark over the short term. Immediate support is seen at 16,100-16,000 bands. On the higher end, resistance is seen at 16,500," said Rupak De, Senior Technical Analyst at LKP Securities.

Amol Athawale, Deputy Vice President - Technical Research at Kotak Securities said that after the sharp pullback rally, Nifty faced resistance near 16,800 and corrected sharply. It made a couple of attempts to clear the resistance of 16,800 but due to constant profit booking at higher levels, it failed.

"For the traders, 16,350 -16,400 would be the immediate resistance level. Above the same, the index could move up to 16,550 and any further upside could lift the index up to 16,700. On the other side, as long as the index is trading below 16,350, the selling pressure is likely to continue. Below which, the correction wave will continue till 16,000-15,900," said Athawale.

 

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First Published: 04 Mar 2022, 04:44 PM IST