Stocks plunge on US bond yields surge, escalating Israel conflict
MUMBAI : Indian stocks plunged on concerns over the impact of rising US bond yields, the widening Israel-Hamas conflict, and the pressure on profitability posed by potentially higher crude oil prices. The decline was fuelled by widespread selling by retail and affluent investors across small- and mid-cap stocks, which had previously outperformed their large-cap counterparts. The Nifty and Sensex fell by more than a percent each, breaching key supports, while the Nifty Midcap 150 and the Nifty Smallcap 250 indices slumped 2.7% and 3.79% each.
The fall was due to direct retail investor selling, which led to overall investor wealth falling by ₹7.47 trillion from Friday’s total market capitalization to ₹308.99 trillion on Monday. The decline happened despite foreign portfolio investors (FPIs) purchasing a provisional ₹252.25 crore and domestic institutional investors buying ₹1,111.84 crore worth of shares. Market experts attributed the decline to high net-worth individuals (HNIs) and retail investors selling off.
The carnage in mid-cap and small-cap stocks led to these indices underperforming the benchmark Nifty and Sensex from their September record highs. While the Nifty and Sensex corrected by 4.6% and 4.9% each from their mid–September record highs of 20,222.45 and 67,927.23, Monday’s fall alone caused the Nifty Midcap 150 to have underperformed, with the index falling 6.8% from its 12 September record of 15,599.05. The correction in small caps resulted in the Nifty Smallcap 250 plummeting by 5.24% from its 18 October record high of 12,590.45.
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