Stock Investors lose over Rs. 7 lakh crore in today's Sensex crashes 1645 Points Down!!!

Sensex crashed over 1,645 points, biggest in over seven years, while more than Rs 7 lakh crore of investors' wealth got wiped out. 

The overall investors' wealth was lower nearly Rs 7 lakh crore as it crashed below Rs 100-lakh crore mark.

Report says that the loss suffered by the 10 biggest companies in terms of market capitalisation was close to Rs. 2 lakh crore. 

As the stock market saw a bloodbath, the investor wealth today crashed by over Rs 7 lakh crore or Rs 7 trillion in the biggest ever single-day loss, as a global rout caused jitters across the board.

Crashing below Rs 100 lakh crore mark, the total investor wealth measured in terms of cumulative valuation of all listed stocks, stood at Rs 95,28,536 crore or Rs 95 trillion at the end of the day.

Though notional in nature, just top-20 companies accounted for more than 5 lakh crore or Rs 5 trillion of losses.

Among investor classes, the promoters' share was more than 50 per cent at about Rs 4 lakh crore or Rs 4 trillion, while FIIs are estimated to have taken a hit of close to Rs 1.5 lakh crore  or Rs 1.5 trillionon their portfolios.

The loss in the accounts of retail investors is estimated at about Rs 75,000 crore, while institutional investors also took a hit of about Rs 1 lakh crore or Rs one trillion.

Looking to garner Rs 9,300 crore from Indian Oil share sale today, the government expects its disinvestment kitty so far this fiscal to swell to Rs 12,600 crore -- making it the best 'first-half' in 7 years. 

So far, the government has sold minority stake in three PSUs -- PFC, REC and Dredging Corp -- to raise over Rs 3,300 crore so far this fiscal. It has scheduled a 10 per cent stake sale in Indian Oil Corp today.

In the first half of the last fiscal 2014-15, the Department of Disinvestment could not divest stake in a single PSU, while in the same period of 2013-14 it had sold stake in six PSUs to garner Rs 1,300 crore. 

In first six months of 2012-13 as well, no divestment took place, while one issue could materialise in the same period of 2011-12 to collect Rs 1,500 crore. 

In the first-half of 2010-11, DoD garnered Rs 2,400 crore through minority stake sales in PSUs, while the figure for the first half of 2009-10 was Rs 4,200 crore. 

The disinvestment department has been set a mammoth target of Rs 69,500 crore in the current fiscal. Of this, Rs 41,000 crore is expected to come from minority stake sale in PSUs, and another Rs 28,500 crore from strategic stake sales. 

So far this fiscal, Indian equity markets have been volatile amid slump in Chinese market and Greek crisis and fears of impending rate hike by the US Federal Reserve. 

The total investor wealth, measured in terms of collective value of all listed stocks, fell to Rs 95.29 lakh crore or Rs 95 trillion at the end of today's trading session -- down from Rs 102.33 lakh crore or Rs 1.02 trillion at the end of last trading session on Friday.

Benchmark shares indices witnessed a carnage on Black Monday with the Sensex registering its highest ever single-day crash as investors shunned equities tracking a sharp sell-off in Chinese stocks on concerns that the sluggish growth in China would lead to global economic slowdown.

The 30-share Sensex closed 1,625 points or 5.9% lower at 25,742 and the Nifty slumped 491 points or 5.9% to end at 7,809.

Both the benchmark indices registered their biggest single-day decline in percentage terms since 6 July, 2009 when they had dropped 5.8% each.

In the broader market, BSE Mid-cap ended down 7.7% and Small-cap indices closed 8.8% lower.

Market breadth ended weak with 2,460 losers and 277 gainers on the BSE. Meanwhile, foreign investors remained net sellers in equities with huge sale of Rs 2,341 crore on Friday, as per provisional stock exchange data.

The India VIX, the measure of market's expectation of volatility over the near term, recorded its highest ever percentage gain up 64% at 28.13 compared to the previous close.

Sectors and stocks

All sectoral indices were in the red with Realty index plunging 11% followed by Oil and Gas, Power, Capital Goods and Bankex down over 7% each among others.

Some of the Sensex stocks which hit 52-week lows today include ICICI Bank, Tata Motors, Oil and Natural Gas Corporation (ONGC), Tata Steel, Hindalco Industries, Cairn India, Gail (India), NMDC, NTPC, Tata Power Company and Vedanta.

Banks which are a proxy to the economy witnessed selling pressure on concerns that demand for credit would remain subdued on account of sluggish economic growth.

The Bank Nifty was down nearly 5%. HDFC, ICICI Bank, HDFC Bank, Axis Bank and SBI crashed 5-8% each.

Shares of oil and gas companies witnessed selling pressure with some of them hitting 52-week lows after concerns over sluggish economic growth in China led to sell-off in global commodities.

Further, Iran's plans to boost crude oil production in an effort to boost market share also dampened sentiment. ONGC, Gail, Reliance Industries ended down 8-13% each.

IT stocks which gained in the previous sessions witnessed profit taking with Infosys, Wipro and TCS ended down 3-5% each. Index heavyweights Reliance Industries ended down 8.6%.

Capital goods shares also witnessed profit taking on concerns that fresh order inflows may be impacted. L&T and BHEL crashed 6-8% each.

Metal stocks weakened on worries over lower demand from China, the world's largest consumer. Vedanta dropped over 7% while Tata Steel and Hindalco were down 3-4% each.

Auto stocks witnessed profit taking on concerns that sales growth in August would remain muted.

Tata Motors, Maruti Suzuki, Bajaj Auto, Hero MotoCorp and M&M were down 3-5.5% each. Dr Reddy’s Lab ended down 4.2% after the company initiated a voluntary recall of Rivastigmine Tartrate Capsules of 1.5 mg strength from the USA market, following failed dissolution specifications. Among other shares, IOC ended down 4%.

The govermnet's 10% stake sale in the company was oversubcribed.

The government on Saturday announced a floor price of Rs 387 a share for an offer for sale (OFS) on Monday.

Shares of Astra Microwave Products ended up 2% in an otherwise weak market, after the company announced the formation of a joint venture company (JVC) with M/s Rafael Advanced Defence Systems Ltd., Israel, for joint production and supply of tactical radio communication systems, electronic war-fare systems and signal intelligence systems.

The benchmark sensitive index Sensex today crashed by 1,624.51 points as rout in Chinese stocks triggered a global sell-off. When the total market valuation of all listed firms at the BSE first hit Rs 100 trillion on November 28, 2014, it had marked ten-times rise in little over a decade.

BSE is among the world's ten largest exchanges in terms of market value, while it is the largest globally for number of firms listed on its platform.

It has over 4,000 actively traded companies and nearly 2.7 crore investors trading on it.

The total market cap is still nearly double the level of about Rs 50 lakh crore or Rs 50 trillion in 2009, while it is still about ten-times of the Rs 10 lakh crore or Rs 10 trillion level scaled in 2003.

Stock markets crashed over 1,700 points or nearly 5 per cent on Monday, making it the biggest fall since 2008.  

This level of slump at the bourses is in tandem with Asian markets that are also trading under pressure, tracking the meltdown in global equity markets on fears of a china-led economic slowdown.  

Not only this, there are five main reasons for this kind of  freefall at Dalal Street.  

China slowdown has an impact  

Despite the government taking several steps to stabilise the economy, the yuan has fallen drastically in the past few days.

Global equities markets have seen more than $5 trillion wiped off their value since China's shock devaluation of the Yuan on August 11 which sparked fears the world's second-largest economy is weaker than thought, says a Reuters report.  

Greece concerns, a worry  

Greece's president has given a go-ahead to the opposition to form a new government after Prime Minister Alexis Tsipras resigned recently, but the country appears almost certain for an election next month which may disrupt the country’s bailout package by the International Monetary Fund (IMF). 

There are chances that Greece may have to exit from the euro-zone.  

Wall Street concerns

US markets ended sharply lower on Friday after growth in the US manufacturing sector slowed unexpectedly to its weakest pace in almost two years in August.

The preliminary US Manufacturing PMI fell to 52.9 in August, its lowest since October 2013.

Rupee posted its steepest fall in four years

The rupee tumbled to over 2-year low at 65.31 against the dollar early last week.

Since then, the rupee has recovered marginally but currency watchers don't see it recovering so soon.  

FIIs exit  

Foreign institutional investors have withdrawn Rs 5,700 crore or Rs 57 billion from the Indian markets on fears that rupee may slide further.

Expert views

"Indian stock markets are witnessing contagion effect of caution in global markets on a suspected China slowdown."

While Indian markets have remained resilient and outperformed regional peers thanks to India's better macro performance over the last two years the overhang of a global risk-off could see capital outflows leading to an excaberated correction in the markets.

"We continue to expect Indian markets to remain an outperformer among emerging markets," said Tirthankar Patnaik, India strategist, Mizuho Bank

“Panic has spread to Indian equities too on the back of global rout driven by Chinese actions. During this wave of selling, we may see a lot of investment opportunities from a medium to long term perspective in Indian equities, which is what we are currently focusing on. We currently hold some cash in our portfolios, and will be looking to invest that into equities as the market becomes more attractive with every decline.”, said Harsha Upadhyaya, Chief Investment Officer (Equity), Kotak Mahindra Asset Management.

Global markets

Asian shares slumped on Monday as investors dumped riskier assets on fears that economic slowdown in China would have an impact on other economies in the continent.

The benchmark Shanghai Composite plunged 9.2% while Hang Seng ended down 5.4% tracking losses in mainland China.

Shares in Japan also witnessed selling pressure with the Nikkei down 4.8% while the Straits Times eased 3.8%.

European shares also opened sharply lower tracking the sharp plunge in Chinese stocks . The CAC-40, DAX and FTSE-100 trimmed some of the early losses and were down 2.3% each.

Rupee

The Indian rupee also dropped to fresh two-year low amid fears of foreign capital outflows tracking weakness in domestic equities and was trading at 66.71 down 89 paise to the US dollar compared to it previous close on Friday.

Meanwhile, Reserve Bank of India governor Raghuram Rajan in his speech at FIBAC 2015 today assured the street that the central bank will have no hesitation in using foreign exchange reserves in a bid to reduce volatility.

“We have approximately $ 380 billion in reserves to be used as and when the need arises. We will have no hesitation in using our reserves when appropriate to reduce volatility in the rupee,” he said.

We have already completed three issues and on Monday we will have the fourth one. Although we are more than a month to go from the first half to end, this will be the best ever first half in past seven fiscals," Disinvestment Secretary Aradhana Johri said. 

My View...

Retail Investors or Individuals lost 75000 crores totally in yesterday's stock market trade...

For example ...

One retail investor holding RIL share 100 shares 1 lakh rupee in January 2014 on bse sensex value 26000 points .Based on percentage value he would have accrued the same 100 shares to say 5 lakh rupee on 23 Aug and came down to the same 1 lakh or 1.5 lakh when bse loses 1600 points and Sensex value down to 25750 points100 billion dollars for 1625 points ... 

I don't know how many companies are trading shares in BSE stock exchange... 

which includes 425 points in NSE stock exchange and no one questioned about this..

It goes like a rumors only... I think China or US may get more benefits....

India is freely gave to 100 billion dollars... 

Now we should think about FDI.. Please analyse yourselves  FDI  required or not our Country..

Collection & Prepared by M.Ajmal Khan.