Domestic equity investors' wealth eroded by more than Rs 4.43 lakh crore on Monday as fears of a financial contagion triggered by one of the biggest bank failures in the US roiled market sentiments.
After a strong opening, Indian stocks went into a tailspin with the benchmark 30-share BSE Sensex tumbling nearly 900 points to close at 58,237.85 points -- sliding for the third straight trading session.
The NSE Nifty too declined 258.60 points to end at 17,154.30 points.
Reflecting the massive sell-off across sectors, the total market valuation of BSE-listed companies stood at Rs 2,58,56,295.60, leaving investors poorer by Rs 4,43,023.89 compared to the closing level on Friday.
The total market valuation was at Rs 2,62,99,319.49 at the end of trading on Friday, when the key index had crashed more than 670 points.
Out of the 3,757 stocks that traded on the BSE, as many as 2,915 closed in the red while 695 managed gains.
A total of 219 stocks touched their 52-week low while 75 reached their 52-week high, as per data available on the exchange.
The failure of the Silicon Valley Bank in the US has triggered concerns about the financial system even though the regulatory authorities concerned are working on ways to manage the situation. The crisis has also come at a time when the central banks are embracing a tighter monetary policy regime to tackle high inflation.
Deepak Jasani, Head of Retail Research at HDFC Securities, said the collapse of startup-focused Silicon Valley Bank continued to batter European and some Asian markets while US large banks failed to hold onto a brief pre-market rally after authorities moved to stem the contagion.
"The slide in stocks comes despite news that HSBC had agreed to buy the British arm of the troubled US tech startup-focused lender for £1," he added.
He also cited that Goldman Sachs Group Inc. economists have said they no longer expect the US Federal Reserve to deliver a rate increase next week.
"The risk of a banking crisis highlights the tension between the Fed efforts to cool the economy and tame inflation with increasing concerns that 4.5 percentage points of rate hikes in the space of a year will trigger a recession and a collapse in riskier assets," he noted.