New-Age Tech Stocks Lose Over $2 Bn In M-Cap Amid Bloodbath On D-Street

New-age tech stocks slumped on Monday (August 5) amid a sell-off in the global stock markets, which also impacted the Indian equity markets significantly.

While shares of gaming major Nazara Technologies and fintech SaaS startup Zaggle declined over 7% each today, as many as eight out of the 23 new-age tech stocks under Inc42’s coverage fell over 5% on the BSE.

For instance, Awfis declined 5.9% today, ideaForge fell almost 5.6%, ixigo slumped about 5.5%, and Paytm plummeted 5.3%. After emerging as the biggest gainer last week, with its shares rallying almost 17%, Zomato fell 2.3% today.

Meanwhile, Nykaa declined 4.9% and TBO Tek and DroneAcharya fell around 4.6% each. IndiaMART InterMESH fell 4.2% today.

Amid this bloodbath, Fino Payments Bank, TAC Infosec, and recently-listed Menhood were the only gainers among the new-age tech stocks today. While Fino gained 2.1%, TAC rose about 5%, and Menhood gained a little over 1%.

Overall, the 25 new-age tech stocks under Inc42’s coverage ended Monday’s trading session with a total market capitalisation of $65.25 Bn, declining from about $67.91 Bn on Friday.

Behind The Global Stock Market Crash

It is pertinent to note that benchmark indices Sensex and Nifty50 slumped 2.74% and 2.68%, respectively, today. Sensex ended the day’s trading at 78,759.4, while Nifty50 closed at 24,055.6.

The India volatility index (VIX) jumped 42% to 20 levels, which, as per analysts, indicates a fear among investors of an economic slowdown.

Most Asian markets slumped today due to fears of impending recession, rising tensions in the Middle East, tightening of monetary policy in Japan, and a few other geopolitical reasons.

“The end of Japan’s carry trade, where investors borrow at low rates to invest in higher-yielding assets, is a key concern. As central banks tighten monetary policies, borrowing costs increase, causing a shift away from riskier assets. Uncertainty in US economic data and global political instability further exacerbate market volatility, prompting widespread reassessment of investment strategies,” said Sharad Chandra Shukla, director at Mehta Equities.

It is pertinent to mention that the Bank of Japan increased the overnight call rate to 0.25% from 0-0.1% last week.

Meanwhile, Tanvi Kanchan, head-UAE business and strategy at Anand Rathi Shares and Stock Brokers, said that today’s sell-off was more of a short-term volatility due to profit booking, and not an indicator of any long-term panic in the Indian equities market. 

However, some analysts are also of the opinion that the volatility in the domestic market might continue in the near term ahead of the RBI’s Monetary Policy Committee meeting, scheduled for August 6-8. Besides, the ongoing geopolitical tensions are also expected to weigh on the investors.

As the Q1 FY25 earnings season is still ongoing, new-age tech stocks are likely to see stock-specific actions in the coming days.