In 100 days of Modi Govt. 2.0, Rs. 12.5 lakh crore of Investors' wealth wiped out
Investors' wealth worth Rs. 12.5 lakh crore has been wiped out in the first 100 days since the second term of Prime Minister Narendra Modi's government started on May 30. At yesterday's closing, the market capitalisation or market value of companies listed on BSE stood Rs. 1,41,15,316.39 crore as against market capitalisation of Rs. 1,53,62,936.40 crore a day before PM Modi's government came to power.
The Sensex has slumped 5.96 per cent or 2,357 points and the NSE Nifty 50 index has dropped 7.23 per cent or 858 points since May 30. Slowing economic growth, along with outflow of foreign funds and weak corporate earnings, are some of the reasons for the slump in equity markets, say analysts.
Foreign investors have been net sellers in the Indian markets. The pressure to sell increased after Finance Minister Nirmala Sitharaman introduced the super-rich tax on foreign investors in the first Budget of second NDA government, which was rolled back a month later.
Since the formation of government, foreign portfolio investors have sold shares worth Rs. 28,260.50 crore, data compiled by National Securities Depository Limited (NSDL) showed.
"The slowdown in the markets started way before the Prime Minister Modi's second term in power. The introduction of long term capital gains tax and dividend distribution tax in February 2018 budget led to the start of fall in equity market valuations and the slump in markets accelerated in the aftermath of the IL&FS crisis," AK Prabhakar, head of research at IDBI Capital, told NDTV.
"A lot of mid- and small-cap companies have corrected big and are at reasonable valuations. IL&FS crisis had a cascading effect on markets and the things are likely to recover from here on," added Mr Prabhakar.
All sector gauges compiled by National Stock Exchange except the Nifty Information Technology index have given negative returns over the last 100 days, with Nifty PSU Bank index dropping 26 per cent. Last month, the government announced mega mergers of state-run banks in which number of government-owned banks will be reduced to 12.
Metal index dropped 20 per cent in the wake of increased trade frictions between US and China. Analysts say despite the anti-dumping duty, China is selling cheap steel which is hurting the domestic metal companies.
Nifty Auto index has slumped 13.48 per cent as auto industry faces its worst slowdown in two decades. "We saw massive rise in autos in the last five years so the slowdown is also visible now. We never saw runaway sales in four wheelers. The way Maruti Suzuki has grown in the last 5 years has been amazing," Mr Prabhakar said.
courtesy: ndtv.com
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India moving towards becoming global economic powerhouse: Kovind
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Amritsar (PTI): Former president Ram Nath Kovind on Friday said that with digital transformation, economic reforms and a strong focus on the ease of doing business, India is moving towards becoming a global economic powerhouse.
He was speaking after inaugurating the 19th edition of the Punjab International Trade Expo (PITEX) in Amritsar.
The former president said that this 19th edition of PITEX is being organised at a time when India is recognised as one of the fastest-growing large economies in the world.
Speaking at the inaugural ceremony of the event organised by the PHD Chamber of Commerce and Industry (PHDCCI) the former president, while referring to Punjab, said the state is a living example of courage, sacrifice and enterprise.
"The spiritual light of Sri Harmandir Sahib (Golden Temple) inspires peace and humanity across the world. The heritage of Punjab is deep and inspiring," Kovind said, according to a statement issued by the PITEX.
The former president congratulated the PHDCCI for hosting the 19th edition of PITEX and suggested that the chamber should expand PITEX outside Punjab.
He proposed that a similar event should also be held in New Delhi.
