Investors have lost a whopping Rs 4.14 lakh crore in two days of trading as stock markets continued to face heavy selling pressure for the second straight session on Tuesday.
The BSE benchmark index crashed 509.04 points, or 1.34%, to end at 37,413.13 due to heavy selling in FMCG, metal, auto and financial stocks amid growing concerns over intensifying global trade war. This is the weakest closing since August 2 when it had ended at 37,165.16. It had lost 467.65 points the previous day.
Total investor wealth is measured in terms of the cumulative market value of all listed stocks on BSE.
Led by the steep decline in stocks, the market capitalisation of BSE-listed companies tumbled by Rs 4,14,121.84 crore to Rs 1,53,25,666 crore in two consecutive days. Experts said that rupee depreciation is a big concern for market sentiment.
The 30-share index tanked more than 1% for the second day in a row after the rupee slid to a new life-time low of 72.73 in afternoon trade. Stock markets had opened higher but bears regained control soon to wipe out initial gains as crude oil prices rebounded in Asian trade.
Besides, mounting tensions over trade war is a worrisome factor for the Indian market, experts said.
From the 30-share basket, 25 stocks ended with losses led by Tata Steel, Power Grid Corporation of India, Hero MotoCorp and Tata Motors.
The broader market also depicted bearish trend, with the S&P BSE mid cap falling by 1.36% and small cap index 1.37%. Sectorally, the BSE consumer durables index was the biggest drag, down 2.47%.
Surging crude oil prices, rupee plunging to record lows and widening trade deficit, besides negative global leads were major factors that dampened sentiments on the domestic bourses, a broker said.
In Asian trade, international benchmark Brent crude again went past $78 to trade at $78.52 a barrel, by rising 1.30% amid looming US sanction against Iran's petroleum industry.
Investors were cautious as trade war concerns between the US and China escalated, brokers said.
"The threat of trade tariffs, outflow of foreign funds and concern on domestic macros will influence investors to stay on a cautious note," Vinod Nair, Head of Research, Geojit Financial Services Ltd, said.
Moreover, expectations of a US interest rate hike this month by the Federal Reserve that may strengthen the dollar and accelerate sell-off by foreign funds in emerging markets too negatively impacted sentiments, brokers said.