Investors lose nearly ₹50 trillion in 7 weeks
Subscribe to enjoy similar stories. Stock market investors have seen their wealth erode by close to ₹50 trillion in the past seven weeks amid a flurry of primary market issuances and foreign institutional investor (FII) selling fuelled by India Inc's tepid earnings growth and rising bond yields in the US. Though analysts are not ruling out a rebound after the brutal sell-off over seven weeks, they doubt the durability of one.
Total investor wealth fell by a whopping ₹47 trillion to ₹427 trillion on Thursday—Friday was a holiday for Prakash Gurupurab—from record market highs since 27 September when overall market capitalization was ₹474 trillion. The Nifty and Sensex hit record highs of 26,277.35 and 85,978.25 each on 27 September. From that date Nifty was down 10.4% at 23,532.7 and Sensex by 9.76% at 77,580.31 on Thursday amid huge FII outflows and large supply of equity.
A fall of more than 10% from record highs puts equity assets in correction zone. Even broader markets have corrected, with Nifty Midcap 150 shedding 10.7% from its record high of 22,515.4 on 25 September to 20,105.25 as of Thursday and the Nifty Small cap 250 by 10.1% from its life high of 18,688.30 on 24 September to 16,801.55 as of Thursday. After the seven weeks fall, the bellwether Nifty trades below its 200-day simple moving average of 23,555.98 as of Thursday closing of 23,532.7.
While markets will continue to remain turbulent, analysts feel a bounce could be possible based on the Nifty getting support around current levels. However, a rebound, if one happens, could be sold into. "We could get a bounce, but it wouldn't be a durable one," said Shankar Sharma, founder of wealth management firm GQuant Investech.
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