Investor Wealth Erodes By Over Rs 2 Lakh Crore As Stocks Tumble
Investor wealth eroded by over Rs 2 lakh crore on Monday after the BSE benchmark index dropped over 491 points following weak sentiments in the broader market. The BSE Sensex plunged 491.28 points, or 1.25 percent, to close at 38,960.79 amid fears that India's retaliatory tariffs on U.S. goods could open new trade war front.
Led by the selling in equity market, the market capitalisation of BSE-listed companies dropped by Rs 2 lakh crore to Rs 1.50 lakh crore. "The fear of defaults creating a contagion effect that could further enhance the liquidity crunch, escalation of tensions on trade front and expensive valuations might have led to the culmination of Indian benchmarks," said Jateen Trivedi, Technical Research Analyst, Bonanza Portfolio Ltd.
Concerns over advancement of monsoon and geo-political issues also played spoilsport for the market. "Markets are currently facing headwinds from both domestic and global front, citing delay in arrival of monsoon, lingering geo-political tension and rebound in the crude oil prices," Jayant Manglik, President - Retail Distribution, Religare Broking Ltd.
Jagannadham Thunuguntla, senior vice president and head of research (wealth), Centrum Broking said, "Indian markets had rough day, as market has been finding it difficult to sustain at elevated levels on the back of muted corporate earnings, slow monsoon season, continuous corporate defaults and developing concerns of India-U.S. trade disagreements."
All BSE sectoral indices ended with losses on Monday with metal, energy and oil and gas indices closing up to 3 percent lower. From the 30-share pack, 27 scrips ended with losses, led by Tata Steel, Vedanta Ltd., Tata Motors and Axis Bank Ltd. At the BSE, 1,879 companies declined, while 685 advanced and 131 remained unchanged. In the broader market, the BSE midcap and smallcap indices also dropped upto 1.35 percent.