On Wednesday, Indian stocks sadly plummeted. Anxiety and uncertainty surrounding the potential for Federal Rate cuts, and the ongoing liquidation of shares in the mid-cap and small-cap markets were key factors contributing to this decrease.
U.S. core inflation rates reported higher than anticipated on Tuesday, subsequently lessening the hope for an immediate rate cut by the federal reserve.
An additional blow to the investors' confidence was the Securities and Exchange Board of India's (SEBI) cautionary warning of the built-up froth surrounding the valuations of small, medium, and microcap.
In a proactive move, ICICI Prudential Asset Management Company halted fresh subscriptions through a lumpsum mode, and switches into ICICI Prudential Smallcap Fund and ICICI Prudential Midcap Fund starting from the 14th of March.
The S&P BSE Sensex, India's benchmark index, hit a low of 72,515.71 and recovered a little to close the session at a loss of 906.07 points, or 1.23 percent, settling at 72,761.89.
Likewise, the NSE Nifty index saw a fall of 338 points, or 1.51 percent, finishing at 21,997.70, after tumbling to 21,905.65.
Further, the BSE MidCap and SmallCap indexes significantly plunged by 4.2 percent and 5.1 percent, respectively, following the SEBI chief's warning on the froth in some market segments.
Despite the market downturn, Uday Kotak, Founder and Director of Kotak Mahindra Bank, remained optimistic about the current state, expressing faith in the existing checks and balances. He does not believe the market has reached the bubble territory.
Consequential losers of this plummet included high-profile companies like Adani Ports, NTPC, Adani Enterprises, Coal India, and Power Grid Corp, with share prices descending by 6-7 percent.
