The bear attack on Dalal Street intensified on Friday with the benchmark Sensex plummeting 687 points on heavy selling in heavyweight shares. With a host of factors like domestic slowdown, higher inflation, US slowdown and diversion of funds to the initial public offerings (IPO) market hitting the sentiment, the market slumped for a fifth trading session in a row.

Investors’ wealth — market capitalisation — took a severe hit in the selling avalanche. Market cap fell by Rs 3,07,000 crore to Rs 66.25 lakh crore during the day, making it one of the steepest declines in the recent past. All the sectoral indices were in the red with oil & gas and realty indices getting the worst hit. While small-caps and mid-cap stocks also sank, Ranbaxy Laboratories and cement pivotals survived the fall.

The 30-share BSE Sensex closed 687 points, or 3.49 per cent lower at 19,013.70, its fourth largest fall ever in terms of absolute points.

“Optimism about making huge profits in IPOs is prompting retail investors to withdraw money from the secondary market and invest in the primary market. Fears of recession in the US are also making investors, especially foreign institutional investors, withdraw from riskier assets,” said Ramdeo Agarwal, managing director of Motilal Oswal Securities.

It was a bad week for investors as a host of negative news from US recession to domestic slowdown hit the market sentiment. The mega IPO of Reliance Power added to the selling pressure as investors sold stocks to invest. The IPO so far has got bids worth over Rs 7,00,000 crore. With the market coming under fire throughout the week, the BSE Sensex lost 8.71 per cent, 1814 points, during the week ended on Friday.

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