100 days of Modi 2.0: ₹12.5 lakh cr of investors’ wealth lost

In the first hundred days of the second term of PM Modi’s government a total of ₹12.5 lakh of Investors' wealth has been wiped out from the market. Foreign portfolio investors have sold shares of ₹28,260.50 crore since the new government was formed hundred days ago, according to a report in NDTV.

A day before Modi government came to power on May 30, the market capitalisation stood at ₹1,53,62,936.40 crore. But on September 9, after 100 days of the Modi government, the market value of companies listed on BSE was ₹ 1,41,15,316.39 crore.

Since May 30, the Sensex went down by 5.96% or 2,357 points and the NSE Nifty 50 index has dropped 7.23 per cent or 858 points.

According to analysts, weak corporate earnings, outflow of foreign funds and slow down in economic growth have been some of the main reasons for the slide in the equity markets.

National Securities Depository Limited (NSDL) data reveal that foreign portfolio investors have sold shares worth ₹28,260.50 crore since the second Modi government came to power.

According to the NDTV report, 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 ₹ 28,260.50 crore, data compiled by National Securities Depository Limited (NSDL) showed.

NDTV quoted AK Prabhakar, head of research at IDBI Capital as saying, "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,"

"A lot of mid- and small-cap space 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," AK Prabhakar further told NDTV

With Nifty PSU Bank index dropping 26 per cent, all sector gauges compiled by National Stock Exchange except the Nifty Information Technology index have given negative returns over the last 100 days. Nifty Bank, Private Bank, Media and Realty sector gauges have also slumped between 10-14 per cent.

The increased trade frictions between US and China has caused metal index to drop 20 per cent. According to analysts, despite the anti-dumping duty, China is selling cheap steel which is hurting the domestic metal companies.

Nifty Auto index has also slumped 13.48 per cent as auto industry is facing its worst slowdown in two decades.