Stock market mayhem: Investors suffer Rs 27 lakh crore loss in 8 trading sessions

According to data from the BSE Sensex, the total market capitalization stood at Rs 42,80,3611.66 crore on February 5, 2025. However, after eight consecutive sessions of decline, it has now dropped to Rs 40,09,9281.11 crore.

The Indian stock market has been facing a continuous decline, with investors losing more than Rs 27 lakh crore in the past eight trading sessions. According to data from the BSE Sensex, the total market capitalization stood at Rs 42,80,3611.66 crore on February 5, 2025. However, after eight consecutive sessions of decline, it has now dropped to Rs 40,09,9281.11 crore.

This means the market has lost over Rs 27 lakh crore during this period. The BSE Sensex index itself has fallen by nearly 3 per cent in the past eight sessions.

The key reason for this decline is the consistent selling by foreign investors. Global factors are also playing a role in weakening market sentiment. Uncertainty over former US President Donald Trump's economic policies has added to concerns. Additionally, high stock valuations have made investors cautious.

Despite the recent Union Budget announcement, the market did not show any positive reaction. Experts believe that multiple factors, including reduced liquidity due to tapering, a slowdown in corporate earnings, high valuations, and global trade uncertainties, are contributing to the current correction.

"The market concluded the week on a sombre note, with a sell-on-rally sentiment. Realty fared the worst, as investors turned cautious with diminishing chances of interest rate cuts and weak industry numbers. The broader market remains under pressure, but the resilience of large-cap stocks is a positive sign. The Indian market has successfully navigated similar challenges in the past, from taper tantrums to geopolitical concerns" said Vinod Nair, Head of Research, Geojit Financial Services.

He further added, "The current correction is driven by a combination of factors, including tapering, an earnings slowdown, elevated valuations, and trade uncertainties. We believe the market is now in the final phase of consolidation. With the broad market having corrected by 14 per cent, the downside appears limited, supported by strong long-term economic fundamentals."

Market analysts suggest that investors should remain cautious and keep an eye on global trends.