Gone per second from stock market in FY12: Rs 10.7 lakh

More than Rs 10 lakh went down the drain at Dalal Street in every second of trade during the fiscal year 2011-12, on an average, as headwinds from abroad tapered the growth momentum of Indian economy and sent the stock markets into a tailspin.

In terms of the cumulative market value of all listed companies, the total investor wealth saw an erosion of Rs 6,21,937 crore during the fiscal ended March 31, 2012.

Taking into account a total of 248 trading sessions during the year, the average loss for a day was about half a billion dollars (Rs 2,508 crore), while the same for one second of trading stood at about Rs 10.7 lakh.

An analysis of market valuation figures for the past decade shows that the losses during the last fiscal erases almost the entire gains from the previous year.

The losses in last fiscal came after two straight years of gains -- Rs 6.7 lakh crore in FY11 and Rs 30.8 lakh crore in FY10 -- and were the second highest in over a decade.

During the last 13 financial years, the overall investor wealth of Indian markets has dipped only four times, but the losses were higher only during FY08-09 (Rs 20.5 lakh crore). The losses stood at about Rs four lakh crore in fiscal 2002-03 and Rs 3.4 lakh crore in the fiscal 2000-2001.

In percentage terms, the dip in the investors' wealth, as also the market barometer Sensex, was about 10% during FY11-12. The Sensex lost over 2,000 points in the fiscal, while it fell by about eight points a day, on an average.

The experts feel that headwinds from overseas markets, mostly fuelled by debt crisis in Europe, were the major triggers for the stock market plunge in India. The country's economic growth rate also slowed down to near six% and the corporate profitability took a hit as well.

The flight of foreign investors' money was a key factor behind Indian markets' downtrend. Given the sharp decline in the rupee value, the losses for overseas investors were, in fact, much higher than the same for domestic entities.

The rupee depreciated by over 14% during FY012, taking the losses for overseas investors to about 22% for the year. The only saving grace for the investors during the year was gold, which appreciated by over 33%.

The silver prices, however, closed the year with a marginal decline of about 0.2%, after highly volatile moves throughout the fiscal.

The losses in stock market could have been much higher, but for a smart rally towards the end, especially during January-February 2012. Heavy sell-off by foreign investors caused some jitters and limited the recovery in March.

After a plunge of over 20% in first nine months till December 2011, the Sensex recovered by about 15% between January and February of 2012. It lost the steam in March, but rallied smartly by over 300 points on the last day of the month and the fiscal on March 31.