Investor wealth shrank by Rs 5.77 lakh crore on Friday as a sharp bout of selling in the final hour of trade dragged benchmark indices deep into the red amid concerns over a weaker monsoon outlook and geopolitical uncertainty.The BSE Sensex plunged 1,092.06 points, or 1.44 per cent, to settle at 74,775.74. During the session, it had fallen as much as 1,278.69 points, or 1.68 per cent, to 74,589.11. The NSE Nifty50 dropped 359.40 points, or 1.50 per cent, to close at 23,547.75.The selloff wiped out Rs 5,77,442.84 crore from the market capitalisation of BSE-listed companies, which stood at Rs 4,64,97,814.78 crore (USD 4.88 trillion) at the close.Selling intensified towards the close, leading to a sharp spike in volatility.“Markets witnessed a sharp bout of volatility in the final hour of trade on Friday, with benchmark indices erasing most of their intraday gains amid heavy selling. After a steady start, the Nifty traded within a narrow range for most of the session; however, intense selling pressure emerged during the final 30 minutes, dragging the index sharply lower before a partial recovery at the close,” said Ajit Mishra, SVP, Research, Religare Broking Ltd, PTI quoted.“The sudden spike in volatility was largely attributed to the MSCI May 2026 index rebalancing, which triggered heavy passive institutional flows during the closing session,” he added.Market sentiment was hit after the India Meteorological Department forecast southwest monsoon rainfall at 90 per cent of the long-period average during the June-September season.“The market witnessed broad-based selling pressure following the IMD’s monsoon forecasts to 90 per cent of the long-period average (LPA), raising concerns among investors. The prospect of deficient rainfall, coupled with the increasing likelihood of an El Niño weather pattern, has heightened fears of elevated food inflation in the coming months,” said Vinod Nair, Head of Research, Geojit Investments Limited, PTI quoted.“However, the downside risk appears partially mitigated by the recent moderation in crude oil prices and bond yields,” he added.The weather office said the Northeast is likely to receive normal rainfall, while the rest of the country may witness below-normal rainfall this monsoon season.Geopolitical developments also weighed on investor sentiment.“Geopolitical uncertainty also continued to weigh on investor confidence. Although initial optimism emerged around a possible extension of the US-Iran ceasefire arrangement, the absence of formal confirmation from Washington kept global institutional investors cautious ahead of the weekend, limiting aggressive risk-taking across equities,” said Hariprasad K, Research Analyst and Founder, Livelong Wealth.Among Sensex constituents, InterGlobe Aviation, Power Grid, NTPC, Bajaj Finance, Mahindra & Mahindra and Tata Steel were among the biggest losers. Tech Mahindra, HCLTech, Larsen & Toubro and Infosys bucked the trend to close higher.The BSE SmallCap Select index declined 1.26 per cent, while the MidCap Select index fell 0.73 per cent.Among sectoral indices, Oil & Gas dropped 2.75 per cent, followed by Metal (2.30 per cent), Utilities (2.23 per cent), Hospitals (2.16 per cent), Energy (2.08 per cent), Commodities (1.94 per cent), Auto (1.90 per cent) and Services (1.58 per cent). IT, Telecommunication and Focused IT ended in the green.On the BSE, 2,673 stocks declined, 1,611 advanced and 179 remained unchanged.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
