Investors lose Rs 6 lakh crore as Sensex, Nifty tumble over 1%

India’s equity markets fell sharply on Tuesday as investors rushed to book profits amid weak global cues and sustained foreign institutional investor (FIl) outflows. The benchmark BSE Sensex plunged 872.98 points (1.06%) to close at 81,186.44, while the NSE Nifty dropped 261.55 points (1.05%) to settle at 24,683.90.

The sell-off was broad-based, with the Nifty MidCap and Nifty SmallCap indices declining 1.6% and 1%, respectively. Sectoral indices were firmly in the red, with Nifty Auto, Bank, Pharma, and FMCG slipping 1-2%, reflecting widespread selling pressure.

The selloff eroded investors’ wealth by over Rs 6 lakh crore on Tuesday as the overall market capitalisation of BSE-listed firms dropped to nearly Rs 438 lakh crore from nearly Rs 444 lakh crore in the previous session.

The downturn was triggered by weak global sentiment after Moody’s downgraded the US government’s credit outlook last Friday, sparking a sell-off in US equities on Monday. Additionally, a resurgence in COVID-19 cases in parts of Asia-including Singapore and Hong Kong-dampened market sentiment, even as India reported only 257 active cases as of May 19.