CHENNAI: Rs 3 lakh crore. That’s how much the investor wealth was eroded on BSE in just five trading sessions. With benchmark Sensex joining the global sell-off spree fuelled by Chinese market tremors, the total investor wealth, measured in terms of collective value of all listed stocks, fell to Rs 96,91,131 crore, down from Rs 100.38 lakh crore at the end of last trading session of 2015.
On Thursday, benchmark Sensex suffered this year’s worst single-day fall of 555 points to end at a 19-month low of 24,851.83 on sustained outflows. The rupee too tumbled to more than a three-week low of 66.93 against the dollar, while gold regained the Rs 26,000-level to trade at a three-week high of Rs 26,330 per 10 grams.
The index ended the day two 18 per cent down at 24,851.83. This is the weakest closing for the Sensex since June 4, 2014, when it closed at 24,805.83. Investors dumped shares across all sectors with no blue-chip being an exception. Sectors including realty, infrastructure, auto metal, power and oil and gas all nosedived as the Chinese stock regulator halted trading on Thursday for the second time in three days.
The broader NSE Nifty cracked below the 7,600-level by slumping 2.23 per cent, or 172.70 points, to 7,568.30 at the close.
The scene was no different across Asian equity markets, with Shanghai shares crashing 7.2 per cent. This followed China’s central bank devaluing its currency by 0.51 per cent to 6.5646 per cent against the dollar - the lowest since March 2011.
“This is a horrible mixture of different concerns for stock markets to handle. With persistent and continued weakness in commodity markets weighing heavily on investor sentiment, we aren’t surprised that global equities have resumed their steep losses and we still see the potential for further declines,” said Lukman Otunuga, Research Analyst, ForexTime.com.
According to Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services Ltd, further depreciation in yuan cannot be ruled out. Indeed, we are nearing the Q3 results season, so near-term fluctuations will depend on earnings guidance and outlook from the companies.