Black Monday! Investors lose Rs 1.25 lakh cr amid volatility

It was a Black Monday for the Street as investors lost Rs 1.25 lakh crore on the BSE in a single trading session, thanks to the global volatility.

The average market capitalisation of BSE listed companies fell from Rs 151.62 lakh crore recorded on May 3 to Rs 150.37 lakh crore on May 6 which translates into a fall of Rs 1.25 lakh crore.

India VIX rose 10 percent and the market breadth was inclined towards the sellers. All the sectoral indices except IT were in the red on May 6.

In terms of sectors, the S&P BSE Consumer Durable index plunged 2.8 percent followed by the S&P BSE Metal index which was down 2.07 percent, and the S&P BSE Realty index was down 1.5 percent.

Bears retained their hold on D-Street as weak global cues pushed benchmark indices below their crucial short-term moving averages in a single trading session on Monday.

Global investors were caught off guard after the US President Donald Trump threatened to raise tariffs on USD 200 billion worth of Chinese goods & services, triggering a global rout in risky assets.

Trump had earlier cited good progress in trade talks and praised his relationship with Chinese President Xi Jinping, said a report.

Chinese benchmark CSI 300 fell around 6.8 percent and Hang Seng was down by 3.4 percent intraday. The worsening situation has put the entire world in a state of flux where even a tiny escalation can cause big damage, but the situation is temporary and D-St should see a recovery on Tuesday, said experts.

“I think it is an impulsive reaction across the globe, but the way I see it market should bounce back. Why I say that is because if you look at crude oil it corrected by almost 2% from the top which is a positive sign for India,” Ritesh Ashar, Chief Strategy Officer at KIFS Trade Capital told Moneycontrol.

“The whole trade talk thing between China & the US will get discounted by the market and as we move forward towards election results, volatility is likely to increase. Technically, 10,550 will be crucial support for the index,” he said.

Stocks in news:

Shares of Morepen Laboratories surged 20 percent after the company posted a 125 percent jump in its Q4 net profit at Rs 9.22 crore against Rs 4.11 crore in the same quarter last fiscal.

Shares of Tata Chemicals rose 8 percent as the company reported a good set of numbers for the quarter ended March 2019.

Firstsource Solutions added 3 percent after the company announced its fourth quarter numbers.

Shares of Alembic Pharmaceuticals gained nearly 3 percent after the company received an establishment inspection report (EIR) from USFDA.

Global Update:

Asian markets ended lower on Monday with China stocks fell most in over 3 years on fresh tariff threats.

Shanghai Composite declined 5.58 percent at 2,906.46 and Hang Seng fell 2.9 percent at 29,209.82.

European markets are also trading lower after US President Donald Trump said that the US would increase tariffs on goods from China.