Investor Wealth Declines By Rs. 3.46 Trillion as Markets Collapse

On Wednesday, investors’ wealth decreased by Rs 3.46 lakh crore as equities fell precipitously on negative global trends and foreign investment outflows.

To end the day at 65,782.78 the 30-share BSE Sensex dropped 676.53 points or 1.02 percent. It fell 1,027.63 points, or 1.54%, throughout the day to 65,431.68.

The market capitalization of BSE-listed companies decreased by Rs 3,46,947.54 crore to Rs 3,03,33,258.69 crore, in keeping with the downward trend in equity prices.

 

“After the exuberant months of June and July, we are now seeing some decent corrections in the Indian markets as a result of Fitch’s downgrading of the US rating. Since the market was in a very overbought area in recent days, it was really just waiting for a reason to correct, and it got one. The effect on the Indian market should likewise be brief since profits, infrastructure investments, and money flows will soon resume receiving attention, according to Vikram Kasat, Head Advisory at Prabhudas Lilladher.

 

The US government’s credit rating has been reduced by Fitch Ratings due to growing federal, state, and municipal debt as well as a “steady deterioration in standards of governance” over the previous 20 years.

 

On Tuesday, the rating was downgraded from AAA, the highest possible rating, to AA+.

 

“Weak global market dynamics caused a wide sectoral decline in the Indian market. Worries were felt all around the world as a result of bad news on the US rating drop due to budgetary concerns and dismal manufacturing activity statistics from the Eurozone and China. The sentiment of the local market has also been disturbed by protracted FII selling, which was brought on by an increase in US bond rates, according to Vinod Nair, Head of Research at Geojit Financial Services.

 

Tata Steel dropped 3.45 percent from the Sensex pack, while Tata Motors dropped 3.19 percent. Among the other significant laggards were Bajaj Finserv, NTPC, State Bank of India, JSW Steel, Larsen & Toubro, and Bharti Airtel.

 

The winners were Nestle, Hindustan Unilever, Asian Paints, Tech Mahindra, and UltraTech Cement.

 

The BSE midcap gauge and smallcap index also saw declines in the wider market of 1.18 and 1.39 percent, respectively.

 

All indices finished lower, with metal down 2.45%, utilities down 2.32, power down 2.31, telecommunications down 2.0%, capital goods down 1.83, autos down 1.52%, oil & gas down 1.47, industrials down 1.46, financial services down 1.33, and commodities down 1.22.

 

Investors had a justification to profit from the recent upswing thanks to a severe sell-off in the European and Asian markets. After the record gain last month, FIIs seem to have sold off local stocks, according to Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.

 

A total of 2,353 stocks fell, 1,240 saw gains, and 139 saw no change.

 

Seoul, Tokyo, Shanghai, and Hong Kong had lower closing prices in Asian markets.

 

The markets in Europe were trading in the negative. Tuesday’s US stock market close was mostly negative.

 

According to exchange statistics, foreign institutional investors (FIIs) sold shares of stock worth Rs 92.85 crore on Tuesday.