Investors lose ₹60 trillion in little over 100 days; pain to continue
Subscribe to enjoy similar stories. MUMBAI : The recent equities sell-off, led by aggressive offloading by foreign portfolio investors (FPI), has eroded investor wealth worth nearly ₹60 trillion in the past three and a half months. Market veterans expect the pain to last so long as the FPI selling continues amid an uncertain macro environment.
The wealth measured by market capitalization of all stocks stood at ₹473.84 trillion on 27 September, when the Nifty 50 was at a record high of 26,277.35. Since then, the benchmark index has corrected 12% to 23,085.95, resulting in a fall of ₹59.61 trillion in investor wealth to ₹414.23 trillion on Monday. A fall of more than 10% from highs implies a correction, and one of more than 20%, a bear market.
Broader markets like the Nifty Smallcap 250 and the Nifty Midcap 150, too, underperformed, falling by 13.5% each since their highs in late September, also contributing to the fall in the market cap. The sell-off has been led by FPIs who have offloaded cash market or secondary shares worth a net ₹1.85 trillion since October through 12 January amid a falling rupee and rising crude oil prices due to fresh US curbs on Russia, showed data from National Securities Depository Ltd (NSDL) and BSE Ltd. Meanwhile, domestic institutional investors (DII), led by mutual funds, have net purchased shares worth ₹2.18 trillion from the secondary market over the same period, showed BSE data.
The reason for the fall despite DII purchases matching FPI sales is that DIIs are bidding at lower prices to give the latter exits. "Volatility will continue so long as FPIs are selling aggressively," said Nilesh Shah, managing director at Kotak Mahindra AMC. “DIIs will give them an exit but at lower prices, so the
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