On Wednesday, the stock market saw a record surge and a record decline within a short span of time. After reaching an all-time high level, Sensex-Nifty rapidly plummeted. The significant decline is being attributed to the increase in COVID-19 cases after a considerable period.
The emergence of 614 new COVID-19 cases within 24 hours not only frightened people but also affected the stock market. Meanwhile, foreign investors (FII) withdrew a substantial amount from the Indian stock market. Amidst this, investors lost 9.1 lakh crore rupees in the stock market.
On December 20, the top 30 shares of Sensex dropped by 931 points or 1.30% to close at 70,506, while the NSE benchmark fell by 303 points or 1.41% to 21,150.
All 30 shares in Sensex experienced a decline, and selling was observed in almost all sectors including Auto, Metal, Bank Nifty, and Services.
Due to this major decline, BSE M-Cap lost nearly 9.1 lakh crore rupees. Out of 3,921 shares in the Sensex, 3,178 witnessed a decline, 657 saw growth, while 86 stocks remained unchanged.
Why the turmoil in the stock market?
614 new cases of the COVID-19 New Variant were recorded during the 24 hours, which frightened the stock market. Foreign investors withdrew more than 600 crores from the Indian stock market, leading to profit booking in stocks. Meanwhile, domestic institutions made purchases worth around 294 crores. Additionally, the stock market faced pressure in banks, metals, and auto stocks with the most significant decline.
Four main reasons for the turmoil in the stock market
- More than 600 new cases of COVID-19 within 24 hours.
- Foreign investors withdrew 600 crores from the Indian stock market.
- Major declines in the banking, metal, and auto sectors. •
- Continuous profit-taking in the rising market also remained a reason.
Lost 9.1 lakh crores
According to BSE M-Cap (BSE Market Capitalization), investors’ wealth had dropped from 359.11 lakh crores evaluated in the previous session to 350.01 lakh crores, witnessing a downfall of 9.11 lakh crores.
Major frontline shares like Reliance Industries, L&T, ICICI Bank, Infosys, SBI, and NTPC also recorded significant declines. Due to this decline in Sensex, 28 stocks reached their 52-week lows on the BSE.
The stock market reached new peaks
It’s notable that on Wednesday, the bullish trend continued until noon. In early trading, the Sensex surged nearly 450 points to reach its new all-time high level of 71,913. A similar scenario unfolded with Nifty, which had reached the level of 21,593 in early trading. However, both later witnessed record declines.
