• Indian equity indices saw a major downturn, with the Sensex falling below 78,000, causing investors to lose over Rs 6 lakh crore.
• Market heavyweights like Reliance Industries and HDFC Bank contributed significantly to this decline.
• The overall market trend remained negative, impacting small and medium stocks considerably.
• The bearish sentiment in the market was highlighted by a bearish engulfing pattern on the daily chart.

The Indian equity indices experienced a significant downturn on Wednesday, with the Sensex slipping below the 78,000 mark. This resulted in investors losing over Rs 6 lakh crore. The market heavyweights, including Reliance Industries and HDFC Bank, were among the major contributors to this decline. The Sensex, a benchmark index of the Bombay Stock Exchange (BSE), was down by 530 points or 0.67 per cent, standing at 78,158 during intra-day trading.

The Nifty, another major index on the National Stock Exchange (NSE), also experienced a drop of 180 points or 0.76 per cent, bringing it down to 23,702. The Sensex even hit an intra-day low of 77,959, reflecting the bearish sentiment in the market. The overall market trend remained negative, with 2,163 stocks in the red compared to 289 stocks in the green on the NSE.

Impact on Market Capitalisation and Small Stocks

This large-scale selling led to a decline in the market capitalisation of all listed companies on the BSE by over Rs 6 lakh crore, bringing it down to Rs 430 lakh crore from Rs 436 lakh crore on Tuesday. The decline had a significant impact on small and medium stocks. The Nifty Midcap 100 index was down by 1,158 points or 2.10 per cent at 54,099, and the Nifty Smallcap 100 index was down by 426 points or 2.37 per cent at 17,566.

The India VIX, an index that measures market volatility, was up by 4.73 per cent at 15.28, indicating increased uncertainty and risk. Almost all NSE indices were trading in the red, with Auto, IT, PSU banks, metal, realty, infra, and PSE being the major laggards. Out of the 30 Sensex stocks, 27 were in the red. The top losers included Tata Steel, M&M, JSW Steel, TCS, Nestle, Reliance Industries, Sun Pharma, and Bajaj Finserv. Only NTPC, Tata Motors, and Titan were trading in the green.

Analyst's View on the Market Trend

Mandar Bhojane, a research analyst at Choice Broking, pointed out that a bearish engulfing pattern had formed on the daily chart, highlighting the increased influence of bearish sentiment. He mentioned, "The immediate support level is situated at 23,650; if this level is breached, the index may slip further to 23,400. On the upside, resistance remains robust, with selling pressure expected around the 24,200-mark."

This event is reminiscent of the 2008 global financial crisis when the Sensex had plunged by over 2,000 points in a single day, wiping out significant investor wealth. However, it's important to note that market dynamics are complex and influenced by a multitude of factors, both domestic and global. Therefore, while historical events provide context, they do not necessarily predict future outcomes.