Market crash on Dalal Street has wiped out Rs 16 lakh crore, with the Sensex plummeting nearly 4,000 points in five trading sessions. The double impact of the Iran-Israel conflict and China’s stimulus package has triggered a strong bearish sentiment in the Indian stock market.
In the second half of the day, the Sensex crash intensified, with the index dropping over 800 points, while Nifty fell nearly 1%, testing its crucial support level of 25,000. Peak valuations in an overheated market had already concerned foreign institutional investors (FIIs), prompting an outflow of funds to China.
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Iran’s missile strikes on Israel, in response to recent air attacks, have further heightened investor caution. FIIs have pulled out nearly Rs 32,000 crore from Indian markets over the last four sessions, with a record Rs 15,243 crore in a single day on Thursday, deepening the Sensex crash.
China’s stimulus has also accelerated the shift of investments from India, as global money managers reduce their positions across Asian markets. Nifty ended Thursday’s session below its 20-day EMA, indicating a bearish trend following the Sensex crash.
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However, domestic investors like mutual funds and PMS funds are hoarding cash to take advantage of market dips. As the Q2 earnings season and assembly elections approach, the market will remain under close scrutiny.
