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Investors' wealth halves in market plunge

Source: PTI
October 08, 2008 19:58 IST
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The continuing plunge on the stock market has halved the investor wealth from the level seen before the downslide began earlier this year, with promoters taking the biggest hit of more than Rs 20 trillion.

The total investor wealth, measured in terms of market capitalisation of all the listed companies together, on Wednesday dipped to about Rs 36.5 trillion as against close to Rs 73 trillion on January 10 when the benchmark Sensex had scaled its life-time high.

In dollar terms, the loss is even bigger as rupee has depreciated sharply against the US currency.

The cumulative market capitalisation of Indian companies stood at $1.8 trillion on January 10, which today came down to $760 billion, as rupee fell from 39.26 per dollar to near 48-level.

The stock market benchmark Sensex fell to as low as 10,750.76 points -- its lowest in more than two years -- before ending the day at 11,328.26 points after some recovery. In the overall loss of close to Rs 36.5 trillion, the company promoters have seen an erosion of over Rs 20 trillion with their holding of about 60 per cent.

After promoters, FIIs have taken the biggest hit with a loss of over Rs 4 trillion, while retail investors have lost more than Rs 3 trillion. The banks, mutual funds and insurance companies have also seen the value of their holdings plunge by close to Rs 3 trillion.

Attributing the fall in stock markets to happenings in the US and Asian markets, Finance Minister P Chidambaram today cautioned against any hasty decisions by investors as fundamentals of the Indian economy are strong.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said stock market plunge is a matter of concern for investors but normalcy will return once global financial markets stabilise.

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