Bloodbath In Stock Market, 7 Most Valued Companies Lose Rs 1 Trillion: Here Is The Reason Why?

On Friday, October 4th, stock markets in India experienced one of its worst hits: The sensex fell for 5th consecutive term as there was bloodbath all around.

Out of the top 10 stocks in India, 7 lost Rs 1 trillion in a combined downfall.

Here are the highlights which you should know:

• Out of top 1o most valued firms in India, 7 took a major hit, as their combined market cap fell by Rs 1 trillion in one single day (October 4th). 
• HDFC Bank was the worst hit among all, as it suffered a downfall of Rs 30,000 crore in this mayhem, as investors sold their shares all around.
• Market cap of ICICI Bank was the 2nd worst stock, as it lost Rs 22,866.93 crore on October 4th
• Kotak Mahindra bank was the 3rd worst stock, as it lost its market cap dropped by Rs 15,624.6 crore
• After the turn of bank stocks, it was the FMCG behemoth Hindustan Unilever (HUL) which suffered the worst hit. Its market cap fell by 14,287.76 crore.

Why Did The Stocks Lost Market Capital?

This bearish mode was activated in the stock market, after the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting which happened last week.

RBI cut its lending rate, yet again by 25 bps, for 5th time this year for reviving India’s economy.

And this triggered anxiety among investors, and they started selling their shares.

In 2019 alone, RBI has reduced a total of 135 bps, even as the repo rate currently stands at 5.15%.

Which Stocks Lost Most Value?

Sector which were directly impacted by this rate cut such as real estate, banks and financial institutions were the worst hit, followed by metal, pharma, FMCG and infra stocks.

Interestingly, IT stocks were the ones whose market cap and share value increased.

TCS was the #1 beneficiary in this regard., followed by Infosys in the IT sector.

Shares of ITC also improved as investors bought these shares, instead of selling them.

We will keep you updated, as more details come in.