Investors lose over ₹19.13 lakh cr wealth in 7 sessions as big bears take wild run on D-Street

Due to back-to-back selling pressure, investors lost a hefty amount of wealth on Dalal Street. To begin with Friday, nearly ₹8.43 lakh crore of investors’ wealth was wiped out in a single day. But if we look closely, the loss is breath-taking to over ₹19.13 lakh crore in seven trading sessions.

As per the latest BSE data, by end of market hours on December 23, the market cap of listed firms was at ₹272.12 lakh crore — lower by ₹8.43 lakh crore from the valuation of over ₹280.55 lakh crore on December 22nd. From Monday, which was also the only gaining day for Indian stocks in the current week, investors’ wealth has tumbled by ₹15.78 lakh crore in 5 days.

On December 19th, the BSE-listed firms’ market valuation was over ₹287.90 lakh crore.

Further, the data revealed that the highest market cap of BSE-listed firms was on December 14th in the current month to ₹291.25 lakh crore. Even when Sensex touched a new lifetime high on Dec 1st, the market cap was only at ₹289.88 lakh crore.

That being said, from December 14 levels, the BSE listed firms’ market cap has nosedived by a huge ₹19.13 lakh crore by end of December 23 — -which is a span of seven trading sessions.

On Friday, Sensex nosedived by 980.93 points or 1.61% to end at 59,845.29. Overall, in the day, the benchmark dipped by 1,061 points. On the other hand, Nifty 50 dropped 320.55 points or 1.77% to close at 17,806.80.

In the week from December 19 to 23rd, Sensex declined by over 2.4% and the Nifty 50 slipped by over 2.5%. This would be their biggest weekly fall in six months. Both benchmarks stand nearly at two-month lows.

Also, it need to be noted that, on December 1st, 2022, the Sensex touched a new lifetime high of 63,583.07 and the Nifty 50 clocked a fresh historic high of 18,887.60. Since then level, the Sensex nosedived by 5.9%, and the Nifty 50 contracted by 5.7% to date.

Explaining the downfall in Indian equities, Mitul Shah – Head of Research at Reliance Securities, hawkish statements by central banks indicating continuity in rate hikes, growing global recession worries, and now surging Covid cases in several countries led to collapse in the market.

Going forward, Shah believes major central banks globally have made it clear that the monetary policy tightening is expected to continue going ahead. The RBI recently raised interest rates by 35bps while the FED, ECB, and Bank of England followed with a 50bps hike each in order to tackle inflation. In India, inflation numbers have softened as November CPI inflation dropped to an 11-month low. WPI inflation for the same month has crashed to a 21-month low. This has been mainly because of softening of food and commodity prices, which will in all probability play a decisive role in RBI’s policy action in February.

Moreover, he added that the ongoing Russia-Ukraine crisis remains a major concern while in China, there has been a massive rise in COVID cases post the easing of the Zero-COVID policy.

“The markets are likely to remain volatile in the coming weeks,” Shah said.

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