Investors' wealth slumps over Rs 5.59 trn in three days of market fall

 

Investors' wealth tumbled more than Rs 5.59 lakh crore in three days of market fall as sentiments remained muted amid the Russia-Ukraine conflict and its impact on the global economy. Continuing its decline for the third day on Friday, the BSE gauge plummeted 1,214.96 points or 2.20 per cent to 53,887.72 during the day. It settled at 54,333.81, a decline of 768.87 points or 1.40 per cent. In three days, the benchmark index tanked 1,913.47 points or 3.40 per cent. Tracking decline in equities, the market capitalisation of BSE-listed companies plunged Rs 5,59,623.71 crore to Rs 2,46,79,421.38 crore in three days. "Markets ended the week with a sharp cut, reflecting the feeble global sentiment. After the sharp reaction in early trade, the benchmark oscillated in the broader range to finally settle around the day's low," Ajit Mishra, vice-president (research) of Religare Broking Ltd, said. In Friday's trade, Titan, Maruti Suzuki India, Asian Paints, Mahindra & Mahindra and Hindustan Unilever Limited were the biggest drags on the Sensex, tumbling up to 5.05 per cent. In the broader market, the BSE midcap and smallcap indices also faced heavy selling, tumbling up to 2.36 per cent.

Modi win makes India stock market story more exciting than ever: Chris Wood

Economy News

The re-election of Narendra Modi as India’s Prime Minister for the second consecutive term with a thumping majority is a positive and the government should now focus on economic development and reforms to create jobs over the next five years, says Christopher Wood, global head of equity strategy at Jefferies.
“With ten years in power he now has the time to change the country in a fundamental way, which makes the Indian stock market story more exciting than ever. Speaking of the stock market it, naturally, greeted the landslide with initial euphoria which is also good for GREED & fear’s Asia ex-Japan long-only portfolio which continues to have a 49 per cent weighting in India,” Wood wrote in his weekly note to investors, GREED & fear.
Wood still maintains his 'double overweight' rating on India in his Asia Pacific ex-Japan relative-return portfolio despite the sharp rally seen over the past few weeks and plans to add to his position on any decline. That said, he does caution against the expensive valuations, at a time when the earnings are also being downgraded again given the lack of cyclical momentum in the economy.
“The FY20-21E earnings estimates of the Indian office of GREED & fear’s new home are 5 – 6 per cent lower for the Nifty Index since the start of 2019 with valuations at a one-year forward PE of over 18x, compared with a 10-year average of 16x,” he says.

 Indian markets have been one of the best performing in the global context thus far in calendar year 2019 (CY19), with the S&P BSE Sensex rallying nearly 11 per cent. The mid-and small-cap indices, however, have been laggards. While the S&P BSE Mid-cap index slipped around 2.5 per cent during this period, the S&P BSE Small-cap index has gained a modest 2 per cent, data from ACE Equity shows.