Weekly Wrap: Investors Lost Rs 11 Lakh Crore In Worst Week For Stocks In Over Nine Years
Investor wealth worth Rs 11.5 lakh crore was wiped off in the last week of February as stocks tumbled amid coronavirus concerns.
Investors lost nearly Rs 11.5 lakh crore in the last week of February as stocks tumbled, tracking a selloff in global equities, amid rising concerns over the novel coronavirus outbreak.
Of this, Rs 5.5 lakh crore was wiped off on Friday alone, according to BSE data. That came as Indian equity indices clocked their worst weekly decline since July 2019, joining the worst global selloff since 2008.
The S&P BSE Sensex slumped 6.98 percent this week to close at 38,297.29 and the NSE Nifty 50 dropped 7.28 percent at 11,201.75. Both indices closed at over a four-month low.
While all the constituents in the 50-share gauge suffered losses this week, the biggest decline was seen in Reliance Industries Ltd., followed by HDFC Ltd. and ICICI Bank Ltd.
Foreign investors, too, pulled out more than Rs 11,000 crore from the Indian equity market in the week ended Feb. 28, the most since August 2015, as the new virus spreads outside China.
The coronavirus threat comes when India’s economy is set to grow at its slowest pace in more than a decade on falling consumption.
As investors pull money out of emerging markets and invest in safe havens, a selloff in the emerging market index will impact the allocation of Indian stocks on that index, Seth Freeman, senior managing director at Glassratner Advisory, told BloombergQuint. “I can see this getting significantly worse over the next few weeks just because of the unknowns.”
But, according to Prateek Agarwal, chief investment officer at ASK Investment Managers, the fall in crude oil prices saves India more import dollars. “The Indian economy has not been fundamentally impacted by the coronavirus effect yet,” the head of India’s largest portfolio manager said. “A few weeks of disruption in specific sectors will not damage the economy too much.”
Agarwal expects markets to make a comeback when governments across the world start pumping in excess liquidity. And he sees the falling stock prices as an “opportunity to buy”.
How The Broader Market Fared
The Nifty Midcap 100 tumbled 7.3 percent this week, the worst since February, 2018. The Smallcap 100 Index, too, dropped 7.9 percent during the period, its worst week since September 2018.
The Nifty 500 Index fell 7.3 percent this week, its worst weekly decline since July 2009.
The Nifty 500 Index was dragged by the losses in Future Consumer Ltd., Bliss GVS Pharma Ltd. and Adani Gas Ltd., among others.
How The Sectors Performed
All the 11 sectoral gauges compiled by the NSE ended lower this week, led by the Nifty Metal Index’s 14 percent plunge, its worst week in more than a decade.
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