With the relentless bears playing party-poopers for the fourth consecutive day strengthening their stranglehold on the country’s premier bourses, Dalal Street has now virtually lost its earlier lustre.
Sustained selling pressure, triggered by worries that official attempts to moderate FII inflows would see foreigners pull out of funds, have put paid to any hopes investors harboured of any possible market revival following renewed assurances from both Finance Minister P Chidambaram & Sebi Chairman M Damodaran.
As a result, investors’ loss rose past $100 billion (over Rs 4 trillion) as the market continued its freefall.
Investor wealth wilts
The total investor wealth, measured in terms of value of all the listed shares, dropped to Rs 54,65,000 crore at the end of Friday’s trading, from over Rs 58,71,000 crore on October 16 before the Sebi proposed measures to curb capital flow through offshore derivative instruments such as participatory notes.
Of the total loss of over Rs 4,06,000 crore (about $102 billion) in the past three days, the 30 biggest blue chip companies, belonging to Sensex, suffered nearly half the amount of Rs 1,96,800 crore (about $50 billion). The Sensex has plunged by close to 1,500 points since October 16. BSE Sensex went down by 438.41 points or 2.44 per cent lower at 17,559.98. During the day, the BSE bellwether index oscillated 805.59 points.
The broader based S&P CNX Nifty lost 135.70 points or 2.54 per cent at 5,215.30. The Nifty October 2007 futures settled at 5208, a discount of 7.30 points compared to spot closing The market declined sharply during first half of trading session, but recovered some ground on value buying coupled with short covering at lower level later.
Intense volatility was hallmark of day’s session, with the market swinging sharply. European markets and Asian markets were trading lower as well.
Analysts reckon that with restriction on participatory notes, near term FII inflow may be affected given that participatory notes contributed substantially to FII inflows on bourses over the past few months. Franklin Templeton Investment (FTI), which operates one of leading mutual funds in India, however, feels that inflow to India from long-term global investors will not be impacted due to these measures given that India’s economic and corporate fundamentals remain robust.
