Wednesday marked a tumultuous day for Indian investors as the nation's stock market experienced a significant downturn in response to global economic concerns. The Nifty 50 and Sensex, India's benchmark indices, both tumbled over 1%, closing with losses of 338 points and 906 points, respectively. This decline came in the wake of the release of US inflation figures for February, which showed a slight increase, stirring apprehensions among investors worldwide.

The repercussions of this downturn were felt across the market, with approximately 161 stocks on the NSE hitting their 52-week lows, while only 17 reached their highs. Similarly, on the BSE, the disparity was evident, with only 89 shares hitting their 52-week highs. Stocks such as Sindhu Trade and Marshall Machines dipped to their lowest levels in the past year, while others like Somi Conveyor and Intellect Design soared to new highs.

Intraday trading saw a flurry of activity, with over 250 stocks on the BSE hitting their 52-week lows, including major players like Hindustan Unilever and Page Industries. Conversely, TCS and NBL were among those reaching new highs, reflecting the volatility and divergence in market sentiment.

The overall market capitalization of firms listed on the BSE witnessed a sharp decline, plummeting from nearly ₹385.6 lakh crore to approximately ₹372.1 lakh crore within a single session. This staggering loss of around ₹13.5 lakh crore underscores the magnitude of the market downturn and its impact on investors.

Arvinder Singh Nanda, Senior Vice President at Master Capital Services Ltd, attributed the market's decline to concerns raised by the market regulator regarding the overvaluation of midcap and small-cap stocks. The regulator's remarks about potential frothiness in these segments sparked speculation about restrictions on fund allocation, leading to disruptions in market sentiment.

In response to these developments, certain mutual fund AMCs initiated measures to restrict fund allocation or lump sum investments in midcap and small-cap segments. This regulatory intervention, coupled with global economic uncertainties, contributed to the turbulence witnessed in the Indian stock market on Wednesday.

Overall, the market meltdown serves as a stark reminder of the interconnectedness of global economies and the significance of economic indicators on investor sentiment. As the market navigates through these challenges, investors remain vigilant, closely monitoring developments both at home and abroad.

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